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CA Intermediate · Taxation · Place of Supply

Vihaan Consultants, a registered firm in Bengaluru, Karnataka, provides management consultancy to Nova Ltd, a registered company with its head office in Hyderabad, Telangana and a branch registered in Chennai, Tamil Nadu. The invoice is raised on Nova's Chennai GSTIN, since the work was for the Chennai branch and the payment is made by that branch. Which statement is correct under the IGST Act, 2017?

The place of supply is Tamil Nadu and the supply is inter-State. For services to a registered person, the place of supply is the recipient's location, which is the registered establishment that received the service as per the GSTIN on the invoice. The supplier is in Karnataka, hence inter-State.

  1. APlace of supply is Telangana, since the head office is the principal place of business
  2. BPlace of supply is Karnataka, since services are performed there
  3. CPlace of supply is Tamil Nadu, being the location of the registered recipient as per the invoice, and the supply is inter-StateCorrect
  4. DPlace of supply is Tamil Nadu and the supply is intra-State since the supplier and recipient are in southern India

Explanation

For services to a registered person, the place of supply is the location of the recipient. Where services are received at a registered establishment, as identified by the GSTIN on the invoice, that establishment is the location. Here Chennai is the location, so the place of supply is Tamil Nadu. Supplier is in Karnataka, so it is inter-State. Option naming Telangana ignores the branch registration, and the last option is wrong as region is irrelevant.

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