New GST Circular Clarifies Place of Supply Rules for Goods Sold to Unregistered Persons
The Government of India, through the Ministry of Finance and the Central Board of Indirect Taxes and Customs (CBIC), has issued Circular No. 209/3/2024-GST to provide clarifications on the provisions of clause (ca) of Section 10(1) of the Integrated Goods and Services Tax (IGST) Act, 2017.
This new circular, dated June 26, 2024, aims to address the issues regarding the place of supply of goods sold to unregistered persons, particularly in the context of e-commerce platforms where the billing and delivery addresses may differ.
Key Provisions of Clause (ca) of Section 10(1) of the IGST Act
Effective from October 1, 2023, clause (ca) has been inserted in Section 10(1) of the IGST Act. This provision stipulates that the place of supply for goods sold to an unregistered person will be determined based on the address recorded in the invoice.
If the invoice does not record the address, the location of the supplier will be considered the place of supply. The explanation added to this clause states that recording the name of the state of the unregistered person in the invoice will be deemed as recording the address.
Clarification on Place of Supply for E-commerce Transactions
The CBIC has received queries from the trade and industry regarding the application of the newly added clause (ca) of Section 10(1) of the IGST Act, especially for supplies made through e-commerce platforms where the billing address and delivery address are different. The circular clarifies the following scenarios:
- Scenario: Different Billing and Delivery Addresses
- Example: Mr. A, an unregistered person located in State X, orders a mobile phone from an e-commerce platform to be delivered to an address in State Y. The billing address provided is in State X.
- Clarification: According to clause (ca), the place of supply will be the address of delivery recorded on the invoice, which in this case is State Y. The supplier may record the delivery address as the address of the recipient on the invoice to determine the place of supply.
Implementation and Further Instructions
The circular requests the issuance of suitable trade notices to publicize its contents. It also asks that any difficulties in implementing the instructions be reported to the Board. The Hindi version of the circular will follow.
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