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CA Intermediate · Taxation · Place of Supply

Vihaan Logistics Pvt. Ltd., Nagpur (Maharashtra), is registered in Maharashtra only. It books a 4-night stay for its employee at a hotel in Jaipur (Rajasthan) operated by Rajputana Hotels, which is registered in Rajasthan. Vihaan holds no registration in Rajasthan. The hotel issues an invoice with Vihaan's GSTIN of Maharashtra. Ignoring any special notification, what is the place of supply for the hotel accommodation service?

The place of supply is Jaipur, Rajasthan. Hotel accommodation is a service directly related to immovable property, so the place of supply is where the property is located, regardless of the recipient's registration or the GSTIN shown. The supply is therefore intra-State for the Rajasthan hotel.

  1. ANagpur, Maharashtra, because the recipient is registered
  2. BJaipur, Rajasthan, where the immovable property is locatedCorrect
  3. CRajasthan or Maharashtra at the option of the supplier
  4. DPlace chosen by the recipient on the invoice

Explanation

Services directly in relation to immovable property, including accommodation in a hotel, are covered by the place of supply being the location of the immovable property, even when the recipient is registered elsewhere. The hotel is at Jaipur, so the place of supply is Rajasthan and the supplier, also in Rajasthan, makes an intra-State supply (CGST plus SGST of Rajasthan). Vihaan's Maharashtra registration does not shift the place, and a Maharashtra GSTIN on the invoice does not change the legal place.

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