Last updated on July 17th, 2017 at 10:01 am
Under GST, specific rules have been laid down for determining the place of supply of telecommunication services and financial services. Knowing how to determine the place of supply is very important to ensure that the correct tax is charged on a supply. Let us understand how to determine the place of supply of telecommunication services and financial services.
Place of supply of telecommunication services
Telecommunication services include the services of telephone, internet, data transfer, broadcasting, cable, DTH (Direct to home) services, etc. For determining place of supply, telecommunication services are divided into 3 categories:
- Services provided using a fixed telecommunication line, leased circuit, internet leased circuit, cable or dish antenna
- Postpaid mobile connection
- Prepaid mobile connection
Type of servicePlace of supplyExample
Services provided using fixed telecommunication line, leased circuits, internet leased circuits, cable or dish antennaLocation where the telecommunication line, leased circuit, cable connection or dish antenna is installedMr. Rajesh, a resident of Madhya Pradesh, purchases a dish antenna from Leo DTH, a company providing DTH services, registered in Madhya Pradesh. The DTH is installed in Mr. Rajesh’s home.
Madhya Pradesh
Madhya Pradesh
: Karnataka
The billing address of the postpaid mobile connection is Karnataka. Hence, the place of supply is Karnataka.
When supplied by a selling agent/re-seller/distributor of the supplierAddress of the selling agent /re-seller/distributor as per the records of the supplier at the time of supplyRadha Recharges, a registered retailer in Tamil Nadu, supplies a prepaid recharge voucher of RT Telecom to a customer.
Tamil Nadu
The place of supply is the address of Radha Recharges, i.e. Tamil Nadu.
When recharge is done through internet banking or other electronic modes of paymentLocation of the recipient in the records of the supplierMs. Lakshmi in Puducherry does a prepaid recharge of her RT Telecom mobile connection. The recharge is done from RT Telecom’s website and payment is done using credit card. RT Telecom is registered in Puducherry and Ms. Lakshmi’s location in the records of RT Telecom is Puducherry.
Puducherry
Puducherry
Place of supply of financial services
Financial services are divided into 2 categories:
- Insurance services
- Banking and other financial services
Type of serviceType of recipientPlace of supplyExample
Insurance servicesRegistered personLocation of the recipientAllen Fire Insurance Corporation, registered in Uttar Pradesh, provides fire insurances services to Ganesh Hardware, registered in Uttar Pradesh
Uttar Pradesh
Uttar Pradesh
Uttar Pradesh
Uttar Pradesh
Ms. Mona, residing in Maharashtra, has an account in Shri Surya Co-operative bank, registered in Gujarat. In the records of the bank, the address of Ms. Mona is of her parents’ home in Gujarat.
Gujarat
Gujarat
As you can observe, in all the cases of telecommunication and financial services, the supply is intrastate. This is because service providers will now need to register in every state where they supply taxable services.
