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We have already covered the place of supply of goods in our article and general rules for place of supply of services. For immovable property, there are separate rules.

What is an immovable property?

An immovable property is an immovable object, a property that cannot be moved without destroying or altering it. It is fixed to the earth, such as a piece of land or a house.

Immovable property includes premises, property rights (for example, inheritable building right), houses, land and associated goods, and chattels if they are located on, or below, or have a fixed address.

Taxability of services of immovable property

Before GST

Service tax was applicable on taxable services provided in relation to an immovable property.

After GST

GST is now applicable in place of service tax.

The type of GST to be charged will depend if the supply is intra-state or inter-state. This will be ascertained by determining the place of supply of the service.

Place of Supply for Services of Immovable Property

place of supply for services of immovable property

place of supply for services of immovable property

If the immovable property (or boat/vessel) is located in more than one State then all the states will be considered as place of supplies in proportion in value of services. The states will share GST in proportion to the value of services.

A table of examples-

place of supply for services of immovable property

Input Tax Credit in above

Place of supply of services provided in relation to an immovable property is the location of the immovable property which means GST will be CGST and SGST.

CGST and SGST credit of one state cannot be used to set-off the liability of another state. 

In the cases of Akash Electronics & Mrs. Bagchi (cases of hotel accommodations), a registered person takes the services of an immovable property in a different state. Akash Electronics is paying CGST & SGST (Maharashtra) although it is registered in Gujarat. Therefore, it cannot claim ITC of Maharashtra SGST against output Gujarat SGST. However, input CGST can be adjusted against output CGST.

How our software can help you?

ClearTax GST Software will make your life much easier. You do not have to calculate the place of supply each and every time for your sales invoices.

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 your 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.

We have an entire series of articles on place of supply-

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