Under GST, the existing system of levy of tax on manufacture, provision of taxable services, and sale of goods will be replaced by the concept of ‘SUPPLY’. The taxable event under GST is the ‘Supply’ of Goods or Services. It is very important, therefore, to understand the place of supply in determining the right charge of tax on supply. The model GST Law lays down the criteria to determine the place of supply. Based on these criteria, you can treat the supply of goods or services as either Intra-State (within the State) or Inter-State (Outside the State).There are two important components which determine the tax to be charged on a supply:•
Location of the Supplier –
It is the registered place of business of the supplier•
Place of Supply –
It is the registered place of business of the recipientLet us understand this with an example.Brad Cars Pvt Ltd’s registered place of business is in Jaipur, Rajasthan. It supplies cars to Ravindra Automobiles, whose registered place of business is in Udaipur, Rajasthan.Here, the location of Brad Cars Pvt Ltd is in Rajasthan and the place of supply is also in Rajasthan. Hence, this is an intra-state supply, i.e. supply within the state. In an intra-state supply, the taxes to be charged are
CGST and SGST
IGST
.
