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Place of Supply of Imports – Explained

Updated on:  

08 min read

We have already covered place of supply of goods, place of supply of general services, place of supply for specific services in our previous articles. In this article, we will discuss the place of supply in cases of import/ export along with numerous examples.

Basics of GST on Imports

As a basic principle, GST law says that all supplies of goods & services made as imports into India will be treated as an inter-state supply. All inter-state supplies attract IGST. So import of goods and services into India will attract IGST. Basic custom duty and all applicable customs levy will continue to be charged.

  • IGST on import of goods will be levied and collected under the Customs Act, 1962.
  • IGST on import of services will be covered under the IGST Act.

Here the importer has to deposit IGST onreverse charge basis. Except in case of OIDAR (Online Information Data Access and Retrieval) services, the supplier has to seek registration and pay taxes. The IGST paid on imports will be available as input tax credit to the importer. This can be set off against the GST outgo on supplies made by the importer.

Understanding Place of Supply of Imports

Place of supply of any goods imported into India is the location of the importer. Therefore, if an importer is located in the state of Karnataka, the state’s share of IGST will go to Karnataka.

Supply isPlace of supplyGST
Goods imported into IndiaLocation of the importerIGST
Services imported to IndiaLocation of the receiver of services (if not available, location of supplier of services)IGST

Place of supply for import/export of goods

Generally

Supply isPlace of supplyGST
Goods Imported into IndiaLocation of the importerAlways IGST on imports
Exported from IndiaLocation outside IndiaExports are exempted

Example 1- Import

Ms. Malini imports school bags from China for her shop (registered in Mumbai).
Place of supply: Mumbai
GST: IGST

Example 2- Export

Ms. Anita (Kolkata) exports Indian perfumes to UK.
Place of supply: UK
GST: Exempted

Place of supply of import/export of services

General rule

SupplyRecipientPlace of supply
Import / Export of servicesAny personLocation of the recipient of services***

***If the location of the recipient is not available then the place of supply shall be the location of the service provider.

Remember, reverse charge applies on the import of services GST, i.e., the service recipient will pay GST. Please refer our article on GST impact on imports for more details.

Import/export of specific services

Note: For the above services, if any service is supplied at more than one location and even if one of them is a taxable territory then the place of supply will be the location in the taxable territory.

For example, if a service is provided in Singapore and India then the place of supply will be India and GST will be applicable. If the above services are supplied in more than one State then all the states will be considered as the place of supplies. The states will share GST in proportion to the value of services.

Remember: In case of import of services, you (the recipient) must pay GST under reverse charge.

Other services

Example 1

Mr. Tom from London visits Mumbai and visits HSBC Mumbai branch.
Place of supply: Mumbai
GST: IGST

Example 2

British Airways flies passengers from Mumbai to New York via London. Mr. Ajay is travelling from Mumbai to New York.
Place of supply: Mumbai (Place where the passenger embarks on the conveyance for a continuous journey)
GST: IGST

OIDAR

In respect of import of online information and database access or retrieval services (OIDAR) by unregistered, non-taxable recipients, the supplier located outside India will be responsible for payment of taxes. Either he will have to take registration or he will have to appoint a person in India to pay GST. Please refer our article on place of supply of OIDAR.

Sale to SEZ units

Supply of goods or services or both to a SEZ developer or SEZ unit will be treated as inter-state supply and IGST will be applicable.

How our software can help you?

ClearTax GST Software will make your life much easier. For your sales invoices, you do not have to calculate the place of supply each and every time. All you need to do you see enter the details of your buyer in the contacts master.

You can use ClearTax Bill Book to generate sales invoices. Based on you buyer’s and your GSTIN the software will automatically calculate the place of supply according to the provisions and inform you whether you will charge CGST/SGST or IGST. For your purchases invoices, all you need to do is upload the excel copy of your purchase invoices. The software will do the rest.

Related Articles

Place of supply of goods

Place of supply of general services

Place of supply for specific services

Place of services related to immovable property

Place of supply for transportation services

Place of supply for telecommunication services

Place of supply for banking services

Place of supply of import of services

Place of supply for online information and database access or retrieval services

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