Bill to – Ship to Model – IGST Act – Version 2 dated 25 November 2016 – Goods and Services Tax – GST – By: – Ramnarayan Balakrishnan – Dated:- 20-1-2017 Last Replied Date:- 20-1-2017 – Chapter IV, Section 7(3) of the draft IGST Act reads as below (verbatim): Where the goods are delivered by the supplier to a recipient or any other person, on the direction of a third person, whether acting as an agent or otherwise, before or during movement of goods, either by way of transfer of documents of title to the goods or otherwise, it shall be deemed that the said third person has received the goods and the place of supply of such goods shall be the principal place of business of such person. While the First Leg of the Transaction is reasonably cle
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Act, is located in the same state as the supplier but issues instructions for delivery of the goods on inter-state basis (which ideally should trigger IGST), then, regardless of the actual movement of goods, his location would be deemed to be the place of supply and result in triggering of CGST + SGST. The aspects discussed above are only in relation to the first leg of the transaction, i.e. between the Supplier of goods and the third person , whether located within or outside the state. B. The Second Leg of the Transaction The next point to reckon with would be the nature of the second leg of the transaction, i.e. between the third person and the ultimate customer who receives the goods. Whether a transaction triggers IGST or CGST+SGST is
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fecting the second leg of the sale transaction, The goods might have reached the ultimate customer. In which case, the place of supply would be the destination of the ultimate customer. Going back to Section 7(3), in this transaction of bill to – ship to , it is deemed that the third person is the recipient of the goods, even though the actual recipient is the ultimate customer. This concept could further complicate the process of determining the actual place of supply. Correspondingly, there would be implications from the input credit perspective also. Thoughts on the above are most welcome. – Reply By Somil Bhansali – The Reply = Sir as per my interpretation the Second leg of Transaction will be as per Section 7(4) of IGST Act where suppl
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