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CA Intermediate · Taxation · Place of Supply

Zenith Bank Ltd, a bank whose branch in Nagpur (Maharashtra) holds the savings account of Ms Sneha, an unregistered individual whose recorded address in the bank's records is in Nagpur. She is currently on a holiday in Goa and withdraws cash using an ATM of another bank, and Zenith charges her a service fee on her account. For banking and financial services provided to an account holder, what is the place of supply of the fee, assuming the location of the recipient is on record?

The place of supply is Nagpur, the location of the recipient on the supplier bank's records. When the recipient's address is recorded by the supplier, that location determines the place of supply for banking services, so Ms Sneha's temporary presence in Goa does not change it.

  1. AGoa, where she was physically present
  2. BLocation of the recipient of services on the records of the supplier, i.e. NagpurCorrect
  3. CLocation of the other bank's ATM
  4. DLocation of the supplier's head office

Explanation

For banking and other financial services to any person, the place of supply is the location of the recipient of services on the records of the supplier, if the address is on record (section 12(2) read with the general rule). Ms Sneha's recorded address is in Nagpur, so Nagpur is the place of supply. Her temporary presence in Goa is irrelevant.

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