Place, Time and Value of Supply and Exemptions
This domain tests the three determinants of every GST transaction: where the supply occurs, when it is taxed, and on what value. Exemptions then remove specified supplies from the charge.
Place of supply
For goods, section 10 of the IGST Act applies. Where goods move, the place of supply is the location where goods are handed over for delivery. In bill-to-ship-to transactions under section 10(1)(b), it is the principal place of business of the third person who directs the supply. Where goods do not move, section 10(1)(c) fixes the location of the goods at delivery. For services, sections 12 and 13 apply; section 13 is the default for cross-border supplies and generally uses the recipient's location, falling back on the supplier's location if the recipient's location is unavailable.
Time of supply
For goods, section 12 uses the earlier of invoice date, removal/last date for removal, or payment. For services, section 13 uses the earlier of invoice date (if issued within 30 days) or completion, and payment. Reverse charge supplies use the earlier of invoice, payment or book entry; associated enterprises use book entry or payment.
Value of supply
Section 15 adopts transaction value where the parties are unrelated, price is the sole consideration, and the supplier and recipient are not related. It includes taxes other than GST, incidental costs, subsidies linked to price, and interest/late fees. Discounts known before supply and linked to invoices are excluded. Rules 27 to 35 provide fallback methods for related persons and pure agents.
Exemptions
Notification 12/2017-Central Tax (Rate) exempts specified services, including many agricultural, health and educational services. Exemption notifications must be read with their conditions.
Worked example
A Chennai supplier sells to a Delhi buyer and, on the buyer's direction, delivers to Coimbatore. Under section 10(1)(b) the place of supply is the third person's principal place of business, Delhi, so IGST applies, not CGST and SGST, even though the goods never leave Tamil Nadu.
Traps
- Using the billing address instead of the statutory place of supply.
- Ignoring the 30-day invoice rule for services.
- Including post-supply discounts not linked to invoices in value.