Place of Supply when Recipient is in same state but Supply is in another state and eligibility of ITC

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Sat Aug 12 2023


Can supplier registered in Maharashtra charged IGST to the recipient who is also registered in Maharashtra and the contract given by the recipient to the supplier for analysis & survey of immovable property which is located in Andhra Pradesh.

Also please clarify whether ITC can be claimed by the recipient under IGST head if both are registered in same state

Sat Aug 12 2023


To answer the first question, Yes.

Please refer to Section 12 of IGST Act 2017 which deals with the "Place of supply of services where location of supplier and recipient is in India".

As per section 12(3)a -

(a) directly in relation to an immovable property, including services provided by architects, interior decorators, surveyors, engineers and other related experts or estate agents, any service provided by way of grant of rights to use immovable property or for carrying out or co-ordination of construction work; shall be the location at which the immovable property or boat or vessel, as the case may be, is located or intended to be located:

As you can see surveyors are covered in the above section so the place of supply is the location of the immovable property.

Hence it is clear that IGST will be charged in the above case.

Now coming to the second question

There are multiple AARs where CGST+SGST has been declared as ineligible where the recipient is located in different state then the place of supply. The logic used there is that these are intra-state supplies and the recipient has to to be registered in the same state as place of supply to claim ITC.

Also, please refer to Notification No. 82 /2020 – Central Tax introducing GSTR-2B, where instruction no 2(b) is as reproduced below-

2(b) Input tax credit shall be indicated to be non-available in the following scenarios: -

i. Invoice or debit note for supply of goods or services or both where the recipient is not entitled to input tax credit as per the provisions of sub-section (4) of Section 16 of CGST Act, 2017.

ii. Invoice or debit note where the Supplier (GSTIN) and place of supply are in the same State while recipient is in another State.

So the CGST+SGST is also ineligible as per GSTR-2B which makes it more clear.

But in the current case, it is IGST and I did not find any section or rule which makes it ineligible. So in my opinion, the ITC is eligible.

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