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Circular No. 203/15/2023-GST
F.No. 20/06/22/2023-GST-CBEC
Circular Date: 27th Oct 2023
CBIS vide its circular no. 203/15/2023 has clarified on issues related to Determination of Place of Supply in following cases –
Issue 1: Determination of Place of Supply in case of Supply of Service of Transportation of Goods, including through Mail and Courier.
Issue 2: Determination of Place of Supply in case of Supply of Services in respect of Advertising Sector
Issue 3: Determination of Place of Supply in case of Supply of “Co-location Services” viz. Hosting and Information Technology Infrastructure provisioning services.
Issue 1: Determination of Place of Supply in case of Supply of Service of Transportation of Goods, including through Mail and Courier.
Clarification:
In cases where location of recipient of services is available, the place of supply of such services shall be the location of recipient of services and in cases where location of recipient of services is not available in the ordinary course of business, the place of supply shall be the location of supplier of services.
Issue 2: Determination of Place of Supply in case of Supply of Services in respect of Advertising Sector
(1) Supply (sale) of space or supply (sale) of rights to use the space on the hoarding/ structure (immovable property) belonging to vendor to the client/advertising company for display of their advertisement on the said hoarding/ structure.
Clarification:
Place of supply of any service provided by way of supply (sale) of space on an immovable property or grant of rights to use an immovable property shall be governed by the provisions of section 12(3)(a) of IGST Act.
As per section 12(3)(a) of IGST Act, the place of supply of services directly in relation to an immovable property or service provided by way of grant of rights to use immovable property or for carrying out or co-ordination of construction work shall be the location at which the immovable property is located.
Conclusion:
The place of supply of service provided by way of supply of sale of space on hoarding/ structure for advertising or for grant of rights to use the hoarding/ structure for advertising in this case would be the location where such hoarding/ structure is located.
(2) Advertising company wants to display its advertisement on hoardings/ bill boards at a specific location availing the services of a vendor i.e. the vendor is responsible for display of the advertisement of the advertisement company at the said location.
Clarification:
The place of supply of the same shall not be covered under section 12(3)(a) of IGST Act. Vendor is in fact providing advertisement services by providing visibility to an advertising company’s advertisement for a specific period of time on his structure possessed/taken on rent by him at the specified location.
Conclusion:
Therefore, such services provided by the Vendor to advertising company are purely in the nature of advertisement services in respect of which Place of Supply shall be determined in terms of Section 12(2) of IGST Act.
Issue 3: Determination of Place of Supply in case of Supply of “Co-location Services” viz. Hosting and Information Technology Infrastructure provisioning services.
Clarification:
It is clarified that Hosting and IT infrastructure provisioning services which includes services such as network connectivity, backup facility, firewall services, monitoring and surveillance service for ensuring continuous operations of the servers and related hardware, air conditioning, security service, fire protection system, power supply etc cannot be considered as service of supply of renting of immovable property.
Conclusion: Therefore, the place of supply of co-location services shall be determined by the place of supply provision as per sub-section 2 of section 12 of IGST Act i.e. location of recipient of co-location service.
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