Case Study on Place of Supply

Case

(A) is registered under GST in Agra ( Uttar Pradesh) as a car dealer and service centre. (B) is a customer located in Agra(U.P.) as unregistered person. For providing the service of repair maintenance of car CGST and SGST is charged on the invoice for labour as well as spare parts both. (C) is a Un registered customer having address of its office at Delhi and he sends his car at Agra(UP) for repair. Whether IGST or CGST/SGST would be charged for the service and repair work as well as for spare parts utilized in the said repair work. (D) is a registered person Manufacturer of Car located in Andhra Pradesh. In this scenario car purchaser located in Agra(UP) gets free service on behalf of the manufacturer under warranty period for which the company (A) issues its Invoice for repair in the name of the manufacturer of car located at Andhra Pradesh for which B2B invoice is raised charging IGST. In this situation which is the place of supply, whether IGST charged on B2B Invoice is proper or not?

FACTS OF THE CASE:

Place of supply for car repair maintenance service provided by Company registered in Agra to unregistered customers located in Agra/Delhi.

LAW APPLICABLE:

SECTION 12 of IGST Act defines POS of services as follows:

(2) The place of supply of services, except the services specified in sub-sections (3) to (14),''

(a) made to a registered person shall be the location of such person;

(b) made to any person other than a registered person shall be,''

(i) the location of the recipient where the address on record exists; and

(ii) the location of the supplier of services in other cases.

INTERPRETATION:

Both supplier and recipient of service are located in India, therefore POS is to be determined as per Section 12 of IGST Act. Since service of repair and maintenance of car do not fall in any of the specified clauses, residuary clause i.e. 12(2) will apply.

CONCLUSION:

1. Service provided by A (registered in Agra) to B (unregistered person located in Agra).
As per section 12(2)(b) POS shall be the location of the B i.e. Agra [CGST & SGST will be charged] where the address on record exists; otherwise location of A i.e. Agra [CGST & SGST will be charged].

2. Service provided by A (registered in Agra) to C (unregistered person located in Delhi).
As per section 12(2)(b) POS shall be the location of the C i.e. Delhi [IGST will be charged] where the address on record exists; otherwise location of A i.e. Agra [CGST & SGST will be charged].

3. Company A (registered in Agra) provides free of cost service to customers on behalf of Company D (registered in Andhra Pradesh) and issues invoice to Company D.
As per section 12(2)(a) POS shall be the location of the D i.e. Andhra Pradesh [IGST will be charged].

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