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CMA Intermediate · Direct and Indirect Taxation · Introduction to GST Law

A Chennai-based consultant (a registered person) receives a taxable service from a supplier located in Dubai. The place of supply is in Tamil Nadu. Under the IGST Act, 2017, the supply is classified as:

The supply is inter-State. Section 7(4) of the IGST Act provides that supply of services imported into the territory of India is treated as inter-State supply, so the fact that the recipient and place of supply are in Tamil Nadu does not make it intra-State.

  1. AIntra-State supply, as the recipient and place of supply are in Tamil Nadu
  2. BNeither inter-State nor intra-State supply until the service is paid for
  3. CInter-State supply, because supply of services imported into the territory of India is treated as inter-StateCorrect
  4. DInter-State supply only if the Dubai supplier's location and place of supply are in two different States

Explanation

Section 7(4) of the IGST Act states that supply of services imported into the territory of India shall be treated as inter-State supply. The location-based test in section 7(3) is not needed. Option A fails because place of supply being within one State does not override the import rule.

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