The Ministry of Finance on June 28, 2019 has issued a circular clarifying the issues raised with regard to the determination of place of supply by various representations received from trade and industry . The circular clarifies the doubts raised regarding the determination of place of supply under Integrated Goods & Services Tax Act, 2017, with respect to various cargo handling services provided by ports to clients and in case of services rendered on unpolished diamonds received from abroad, which are exported after cutting, polishing etc.
Place of supply for cargo handling services by Port Authorities
The place of supply will be determined as per the provisions contained in Section 12(2) and Section 13(2) of the IGST Act, based on the terms of the contract between the supplier and recipient of such services:
i) If the services are made to a registered person, the place of supply shall be the location of registered person.
ii) If the services are made to a non-registered person, the place of supply shall be the location of the non-registered person if the address on record exists. It will be the location of supplier if no address on record exists.
Place of supply for services rendered on unpolished diamonds
Place of supply in case of performance based services from abroad, is generally the place of services is where the services are actually performed. However, in case of services supplied in respect of goods which are temporarily imported for repairs or for any other treatment or process and are exported after such repairs or treatment or process without being put to any use in India, place of supply will be determined as per Section 13(2) of the IGST Act.
Hence, unpolished diamonds imported in India for cutting and polishing activity, the Place of supply shall be the location of the recipient and if the location of recipient is not available the place of supply shall be the location of the supplier.
Click here to see circular.