GST INDIA DAILY

Last week we have gone-through overview of Place of Supply under GST. Read Part 8 of Place of Supply under GST, Please go through. Part Link:

https://wordpress.com/read/blogs/170704436/posts/620

DETERMINATION OF PLACE OF SUPPLY OF SERVICES

In this article, let us understand how to determine the Place of Supply for financial services.

j)       Financial Services:

Financial services are divided into 2 categories:

1. Banking and other financial services
2. Insurance services

 Banking and other financial services

This includes the services by supply of banking and other financial services including stock broking services.

Determination of place of supply:

The place of supply in this case shall be the location of the recipient if the recipient’s detail is on the records of the supplier of services.

If it is not available, the place of supply shall be the location of the supplier.

Example:

1. Ms. Prema is residing in Bangalore(Karnataka).She has an account in a bank. She has given the details of her permenant address at Chennai (Tamilnadu) for her bank account. Transactions are made by her in the bank from Bangalore. The place of supply of such transactions shall be Tamilnadu which is on the records of the bank.

• Mrs. Haritha is an unregistered person. She is from New Delhi and has an account with a Bank at Cochin (Kerala). She goes on a vacation in Rajasthan and visits the bank for getting a Demand Draft made. The place of supply in this case is Kerala which is the address of the recipient is available in the records of the supplier.
• In the same case as example 2, Mrs. Haritha avails foreign exchange transaction from the bank in Rajasthan which is not related to her bank account. Now, theplace of supply is Rajasthan since the recipient detail is not available in regard to this transaction.

Insurance Services:

This includes the supply of insurance services.

Determination of place of supply:

• If such insurance services are offered to a registered person, the place of supply shall be the the location of the person to whom such services are supplied.
• If services are provided to the unregistered person, the place of supply of shall be the location of the recipient in the records of the supplier.

Example:

1. Darby ltd registered company at Telangana obtained a fire insurance policy from ABC Insurance Corp which is registered at Tamilnadu. The place of supply for such service is Telangana.

• Ms. Sandhya, an unregistered person from Madurai (Tamilnadu) got an insurance policy from ABC Insurance Corp registered at kerala. The place of supply of such service is Tamilnadu.

Advertisement Services:

The supply of advertisement services to

• the Central Government,
• State Government,
• a statutory body or a local authority.

Provided such an authority is identified in the contract.

Determination of place of supply:

 The place of supply of services shall be taken as being in each of such States or Union territories. And the value of such supplies specific to each State or Union territory shall be in proportion as determined in terms of the contract.

However, the value of supply of such a service shall be taken as per the rules set in case there is no such contract.

Example:

Adzap ltd is a registered supplier at Mumbai, Maharashtra. It supplies advertisement services to Tamilnadu and Karnataka Government equally as per the agreement. The place of supply shall be Tamilnadu and Karnataka. The value shall be proportioned equally to each state.

STAY TUNE TO THE RIDE OF GST WAVE

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MANIMARAN KATHIRESAN ( ON BEHALF OF GST INDIA DAILY TEAM)