Goods and Services Tax – GST – By: – Dr. Sanjiv Agarwal – Dated:- 23-7-2016 – The concept of place of 'supply of goods's new in indirect taxation as presently 'place of removal' is relevant in central excise and 'sale' is relevant for value added tax. With GST, place of removal will no longer be relevant which has been a subject matter of interpretation and litigation in the present law. Section 5 of Model IGST law provides for provisions to determine the place of supply of goods only. Supply of goods may or may not involve movement of goods and supply of goods may take place under different situations and for different type of goods by supplier or receiver itself. Place of supply matrix Place of Supply 2 Where supply involves movement of goods Location of goods when movement of goods terminate for delivery to recipient 2A Where goods are delivered on directions of third person (transfer of documents) Principal place of business of third person who shall be dee
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s where such movement terminates for delivery to the recipient. Generally, it will be the location of receiver of goods. Delivery based place of supply (sub-section 2A) 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. Goods may be delivered to receiver or his agent or on his direction to any other person. It may be before or during the movement of goods and such delivery may be actual or by way of transfer of documents of title on goods. In case of such delivery of goods to third person, it shall be deemed that the place of supply of goods shall be the location of principal place of business of such person t
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ch installation or assembly. Where the goods are supplied for assembly, installation (or even commissioning, erection, fabrication etc) at site, place of supply of goods in question shall be the location of site where goods are supplied and used for assembly etc. Goods supplied on board a conveyance (sub-section 5) Where the goods are supplied on board a conveyance, such as a vessel, an aircraft, a train or a motor vehicle, the place of supply shall be the location at which such goods are taken on board. For supplies on board a conveyance (e.g. train, aircraft, vessel, motor vehicle etc), since conveyance is a moving subject, place of supply shall be the location where goods are taken on board. For example, in a Shatabdi train from New Delhi to Dehradoon, food is supplied or taken at board at New Delhi. The place of supply shall be New Delhi irrespective of where goods are consumed or where the train terminates. This provision is different from sub-section (1) where goods move from one
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