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CA Intermediate · Taxation · Place of Supply

Kavya Interiors, a registered person in Bengaluru (Karnataka), provides interior design consultancy for a flat in Chennai (Tamil Nadu) to Mr. Arjun, an unregistered individual resident in Chennai who is the owner of the flat. Which is the place of supply for this service, and what tax applies if Kavya Interiors is in Karnataka?

The place of supply is Tamil Nadu and IGST applies. Services directly related to immovable property, such as interior design, are supplied where the property is located. Since the supplier is in Karnataka and the place of supply is Tamil Nadu, the supply is inter-State.

  1. AKarnataka; CGST and SGST of Karnataka
  2. BTamil Nadu; IGSTCorrect
  3. CTamil Nadu; CGST and SGST of Tamil Nadu
  4. DKarnataka; IGST

Explanation

Services directly in relation to an immovable property, including architects and interior decorators, have the place of supply where the immovable property is located. The flat is in Tamil Nadu, so the place of supply is Tamil Nadu. The supplier's location is Karnataka, so it is an inter-State supply and IGST applies. CGST+SGST would apply only if both were in the same State.

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