13. Place of supply of services where location of supplier or location of recipient is outside
India.––
(1) The provisions of this section shall apply to determine the place of supply of services where
the location of the supplier of services or the location of the recipient of services is outside India.
(2) The place of supply of services except the services specified in sub-sections
(3) to
(13) shall be the
location of the recipient of services:
Provided that where the location of the recipient of services is not available in the ordinary course of
business, the place of supply shall be the location of the supplier of services.
(3) The place of supply of the following services shall be the location where the services are actually
performed, namely:—
(a) services supplied in respect of goods which are required to be made physically available by
the recipient of services to the supplier of services, or to a person acting on behalf of the supplier of
services in order to provide the services:
Provided that when such services are provided from a remote location by way of electronic
means, the place of supply shall be the location where goods are situated at the time of supply of
services:
1
[Provided further that nothing contained in this clause shall apply in the case of services supplied
in respect of goods which are temporarily imported into India for repairs or for any other treatment or
1. Subs. by Act 32 of 2018, s. 6 for the second proviso (w.e.f. 1-2-2019)
11
process and are exported after such repairs or treatment or process without being put to any use in
India, other than that which is required for such repairs or treatment or process;]
(b) services supplied to an individual, represented either as the recipient of services or a person
acting on behalf of the recipient, which require the physical presence of the recipient or the person
acting on his behalf, with the supplier for the supply of services.
(4) The place of supply of services supplied directly in relation to an immovable property, including
services supplied in this regard by experts and estate agents, supply of accommodation by a hotel, inn,
guest house, club or campsite, by whatever name called, grant of rights to use immovable property,
services for carrying out or co-ordination of construction work, including that of architects or interior
decorators, shall be the place where the immovable property is located or intended to be located.
(5) The place of supply of services supplied by way of admission to, or organisation of a cultural,
artistic, sporting, scientific, educational or entertainment event, or a celebration, conference, fair,
exhibition or similar events, and of services ancillary to such admission or organisation, shall be the place
where the event is actually held.
(6) Where any services referred to in sub-section
(3) or sub-section
(4) or sub-section
(5) is supplied
at more than one location, including a location in the taxable territory, its place of supply shall be the
location in the taxable territory.
(7) Where the services referred to in sub-section
(3) or sub-section
(4) or sub-section
(5) are supplied
in more than one State or Union territory, the place of supply of such services shall be taken as being in
each of the respective States or Union territories and the value of such supplies specific to each State or
Union territory shall be in proportion to the value for services separately collected or determined in terms
of the contract or agreement entered into in this regard or, in the absence of such contract or agreement,
on such other basis as may be prescribed.
(8) The place of supply of the following services shall be the location of the supplier of services,
namely:––
(a) services supplied by a banking company, or a financial institution, or a non-banking financial
company, to account holders;
(b) intermediary services;
(c) services consisting of hiring of means of transport, including yachts but excluding aircrafts
and vessels, up to a period of one month.
Explanation.––For the purposes of this sub-section, the expression,––
(a) “account” means an account bearing interest to the depositor, and includes a non-resident
external account and a non-resident ordinary account;
(b) “banking company” shall have the same meaning as assigned to it under clause
(a) of
section 45A of the Reserve Bank of India Act, 1934 (2 of 1934);
(c) ‘‘financial institution” shall have the same meaning as assigned to it in clause
(c) of
section 45-I of the Reserve Bank of India Act, 1934 (2 of 1934);
(d) “non-banking financial company” means,––
(i) a financial institution which is a company;
(ii) a non-banking institution which is a company and which has as its principal business
the receiving of deposits, under any scheme or arrangement or in any other manner, or
lending in any manner; or
(iii) such other non-banking institution or class of such institutions, as the Reserve Bank
of India may, with the previous approval of the Central Government and by notification in the
Official Gazette, specify.
(9) The place of supply of services of transportation of goods, other than by way of mail or courier,
shall be the place of destination of such goods.
12
(10) The place of supply in respect of passenger transportation services shall be the place where the
passenger embarks on the conveyance for a continuous journey.
(11) The place of supply of services provided on board a conveyance during the course of a passenger
transport operation, including services intended to be wholly or substantially consumed while on board,
shall be the first scheduled point of departure of that conveyance for the journey.
(12) The place of supply of online information and database access or retrieval services shall be the
location of the recipient of services.
Explanation.––For the purposes of this sub-section, person receiving such services shall be deemed to
be located in the taxable territory, if any two of the following non-contradictory conditions are satisfied,
namely:––
(a) the location of address presented by the recipient of services through internet is in the taxable
territory;
(b) the credit card or debit card or store value card or charge card or smart card or any other card
by which the recipient of services settles payment has been issued in the taxable territory;
(c) the billing address of the recipient of services is in the taxable territory;
(d) the internet protocol address of the device used by the recipient of services is in the taxable
territory;
(e) the bank of the recipient of services in which the account used for payment is maintained is in
the taxable territory;
(f) the country code of the subscriber identity module card used by the recipient of services is of
taxable territory;
(g) the location of the fixed land line through which the service is received by the recipient is in
the taxable territory.
(13) In order to prevent double taxation or non-taxation of the supply of a service, or for the uniform
application of rules, the Government shall have the power to notify any description of services or
circumstances in which the place of supply shall be the place of effective use and enjoyment of a service.
14. Special provision for payment of tax by a supplier of online information and database access
or retrieval services.––
(1) On supply of online information and database access or retrieval services by
any person located in a non-taxable territory and received by a non-taxable online recipient, the supplier
of services located in a non-taxable territory shall be the person liable for paying integrated tax on such
supply of services:
Provided that in the case of supply of online information and database access or retrieval services by
any person located in a non-taxable territory and received by a non-taxable online recipient, an
intermediary located in the non-taxable territory, who arranges or facilitates the supply of such services,
shall be deemed to be the recipient of such services from the supplier of services in non-taxable territory
and supplying such services to the non-taxable online recipient except when such intermediary satisfies
the following conditions, namely:––
(a) the invoice or customer’s bill or receipt issued or made available by such intermediary taking
part in the supply clearly identifies the service in question and its supplier in non-taxable territory;
(b) the intermediary involved in the supply does not authorise the charge to the customer or take
part in its charge which is that the intermediary neither collects or processes payment in any manner
nor is responsible for the payment between the non-taxable online recipient and the supplier of such
services;
(c) the intermediary involved in the supply does not authorise delivery; and
(d) the general terms and conditions of the supply are not set by the intermediary involved in the
supply but by the supplier of services.
13
(2) The supplier of online information and database access or retrieval services referred to in
sub-section
(1) shall, for payment of integrated tax, take a single registration under the Simplified
Registration Scheme to be notified by the Government:
Provided that any person located in the taxable territory representing such supplier for any purpose in
the taxable territory shall get registered and pay integrated tax on behalf of the supplier:
Provided further that if such supplier does not have a physical presence or does not have a
representative for any purpose in the taxable territory, he may appoint a person in the taxable territory for
the purpose of paying integrated tax and such person shall be liable for payment of such tax.
CHAPTER VI
REFUND OF INTEGRATED TAX TO INTERNATIONAL TOURIST
15. Refund of integrated tax paid on supply of goods to tourist leaving India.––The integrated tax
paid by tourist leaving India on any supply of goods taken out of India by him shall be refunded in such
manner and subject to such conditions and safeguards as may be prescribed.
Explanation.––For the purposes of this section, the term “tourist” means a person not normally
resident in India, who enters India for a stay of not more than six months for legitimate non-immigrant
purposes.
CHAPTER VII
ZERO RATED SUPPLY
16. Zero rated supply.––
(1) “zero rated supply” means any of the following supplies of goods or
services or both, namely:––
(a) export of goods or services or both; or
(b) supply of goods or services or both 1[for authorised operations] to a Special Economic Zone
developer or a Special Economic Zone unit.
(2) Subject to the provisions of sub-section
(5) of section 17 of the Central Goods and Services Tax
Act, credit of input tax may be availed for making zero-rated supplies, notwithstanding that such supply
may be an exempt supply.
2
[
(3) A registered person making zero rated supply shall be eligible to claim refund of unutilized input
tax credit on supply of goods or services or both, without payment of integrated tax, under bond or Letter
of Undertaking, in accordance with the provisions of section 54 of the Central Goods and Services Tax
Act or the rules made thereunder, subject to such conditions, safeguards and procedure as may be
prescribed:
Provided that the registered person making zero rated supply of goods shall, in case of non-realisation
of sale proceeds, be liable to deposit the refund so received under this sub-section along with the
applicable interest under section 50 of the Central Goods and Services Tax Act within thirty days after the
expiry of the time limit prescribed under the Foreign Exchange Management Act, 1999 (42 of 1999) for
receipt of foreign exchange remittances, in such manner as may be prescribed.
(4) The Government may, on the recommendation of the Council, and subject to such conditions,
safeguards and procedures, by notification, specify––
(i) a class of persons who may make zero rated supply on payment of integrated tax and claim
refund of the tax so paid;
(ii) a class of goods or services which may be exported on payment of integrated tax and the
supplier of such goods or services may claim the refund of tax so paid.]
1. Ins. by Act 13 of 2021, s. 123 (w.e.f. 28-3-2021).
2. Subs. by s. 123, ibid., for sub-section
(3) (w.e.f. 28-3-2021).
14
CHAPTER VIII
APPORTIONMENT OF TAX AND SETTLEMENT OF FUNDS
17. Apportionment of tax and settlement of funds.––
(1) Out of the integrated tax paid to the
Central Government,––
(a) in respect of inter-State supply of goods or services or both to an unregistered person or to a
registered person paying tax under section 10 of the Central Goods and Services Tax Act;
(b) in respect of inter-State supply of goods or services or both where the registered person is not
eligible for input tax credit;
(c) in respect of inter-State supply of goods or services or both made in a financial year to a
registered person, where he does not avail of the input tax credit within the specified period and thus
remains in the integrated tax account after expiry of the due date for furnishing of annual return for
such year in which the supply was made;
(d) in respect of import of goods or services or both by an unregistered person or by a registered
person paying tax under section 10 of the Central Goods and Services Tax Act;
(e) in respect of import of goods or services or both where the registered person is not eligible for
input tax credit;
(f) in respect of import of goods or services or both made in a financial year by a registered
person, where he does not avail of the said credit within the specified period and thus remains in the
integrated tax account after expiry of the due date for furnishing of annual return for such year in
which the supply was received,
the amount of tax calculated at the rate equivalent to the central tax on similar intra-State supply shall be
apportioned to the Central Government.
(2) The balance amount of integrated tax remaining in the integrated tax account in respect of the
supply for which an apportionment to the Central Government has been done under sub-section
(1) shall
be apportioned to the,––
(a) State where such supply takes place; and
(b) Central Government where such supply takes place in a Union territory:
Provided that where the place of such supply made by any taxable person cannot be determined
separately, the said balance amount shall be apportioned to,––
(a) each of the States; and
(b) Central Government in relation to Union territories,
in proportion to the total supplies made by such taxable person to each of such States or Union territories,
as the case may be, in a financial year:
Provided further that where the taxable person making such supplies is not identifiable, the said
balance amount shall be apportioned to all States and the Central Government in proportion to the amount
collected as State tax or, as the case may be, Union territory tax, by the respective State or, as the case
may be, by the Central Government during the immediately preceding financial year.
1
[(2A) The amount not apportioned under sub-section
(1) and sub-section
(2) may, for the time being,
on the recommendations of the Council, be apportioned at the rate of fifty per cent. to the Central
Government and fifty per cent. to the State Governments or the Union territories, as the case may be,
on ad hoc basis and shall be adjusted against the amount apportioned under the said sub-sections.]
(3) The provisions of sub-sections
(1) and
(2) relating to apportionment of integrated tax shall, mutatis
mutandis, apply to the apportionment of interest, penalty and compounding amount realised in connection
with the tax so apportioned.
1. Ins. by Act 32 of 2018, s. 7 (w.e.f. 1-2-2019).
15
(4) Where an amount has been apportioned to the Central Government or a State Government under
sub-section
(1) or sub-section
(2) or sub-section
(3), the amount collected as integrated tax shall stand
reduced by an amount equal to the amount so apportioned and the Central Government shall transfer to
the central tax account or Union territory tax account, an amount equal to the respective amounts
apportioned to the Central Government and shall transfer to the State tax account of the respective States
an amount equal to the amount apportioned to that State, in such manner and within such time as may be
prescribed.
(5) Any integrated tax apportioned to a State or, as the case may be, to the Central Government on
account of a Union territory, if subsequently found to be refundable to any person and refunded to such
person, shall be reduced from the amount to be apportioned under this section, to such State, or Central
Government on account of such Union territory, in such manner and within such time as may be
prescribed.
1
[17A. Transfer of certain amounts.––Where any amount has been transferred from the electronic
cash ledger under this Act to the electronic cash ledger under the State Goods and Services Tax Act or the
Union Territory Goods and Services Tax Act, the Government shall transfer to the State tax account or the
Union territory tax account, an amount equal to the amount transferred from the electronic cash ledger, in
such manner and within such time, as may be prescribed.]
18. Transfer of input tax credit.––On utilisation of credit of integrated tax availed under this Act for
payment of,––
(a) central tax in accordance with the provisions of sub-section
(5) of section 49 of the Central
Goods and Services Tax Act, the amount collected as integrated tax shall stand reduced by an amount
equal to the credit so utilised and the Central Government shall transfer an amount equal to the
amount so reduced from the integrated tax account to the central tax account in such manner and
within such time as may be prescribed;
(b) Union territory tax in accordance with the provisions of section 9 of the Union Territory
Goods and Services Tax Act, the amount collected as integrated tax shall stand reduced by an amount
equal to the credit so utilised and the Central Government shall transfer an amount equal to the
amount so reduced from the integrated tax account to the Union territory tax account in such manner
and within such time as may be prescribed;
(c) State tax in accordance with the provisions of the respective State Goods and Services Tax
Act, the amount collected as integrated tax shall stand reduced by an amount equal to the credit so
utilised and shall be apportioned to the appropriate State Government and the Central Government
shall transfer the amount so apportioned to the account of the appropriate State Government in such
manner and within such time as may be prescribed.
Explanation.––For the purposes of this Chapter, “appropriate State” in relation to a taxable
person, means the State or Union territory where he is registered or is liable to be registered under the
provisions of the Central Goods and Services Tax Act.
19. Tax wrongfully collected and paid to Central Government or State Government.––
(1) A
registered person who has paid integrated tax on a supply considered by him to be an inter-State supply,
but which is subsequently held to be an intra-State supply, shall be granted refund of the amount of
integrated tax so paid in such manner and subject to such conditions as may be prescribed.
(2) A registered person who has paid central tax and State tax or Union territory tax, as the case may
be, on a transaction considered by him to be an intra-State supply, but which is subsequently held to be an
inter-State supply, shall not be required to pay any interest on the amount of integrated tax payable.
CHAPTER IX
MISCELLANEOUS
20. Application of provisions of Central Goods and Services Tax Act.––Subject to the provisions
of this Act and the rules made thereunder, the provisions of Central Goods and Services Tax Act relating
to,––
1. Ins. by Act 23 of 2019, s. 114 (w.e.f. 01-01-2020).
16
(i) scope of supply;
(ii) composite supply and mixed supply;
(iii) time and value of supply;
(iv) input tax credit;
(v) registration;
(vi) tax invoice, credit and debit notes;
(vii) accounts and records;
(viii) returns, other than late fee;
(ix) payment of tax;
(x) tax deduction at source;
(xi) collection of tax at source;
(xii) assessment;
(xiii) refunds;
(xiv) audit;
(xv) inspection, search, seizure and arrest;
(xvi) demands and recovery;
(xvii) liability to pay in certain cases;
(xviii) advance ruling;
(xix) appeals and revision;
(xx) presumption as to documents;
(xxi) offences and penalties;
(xxii) job work;
(xxiii) electronic commerce;
(xxiv) transitional provisions; and
(xxv) miscellaneous provisions including the provisions relating to the imposition of interest and
penalty,
shall, mutatis mutandis, apply, so far as may be, in relation to integrated tax as they apply in relation to
central tax as if they are enacted under this Act:
Provided that in the case of tax deducted at source, the deductor shall deduct tax at the rate of two per
cent. from the payment made or credited to the supplier:
Provided further that in the case of tax collected at source, the operator shall collect tax at such rate
not exceeding two per cent, as may be notified on the recommendations of the Council, of the net value of
taxable supplies:
Provided also that for the purposes of this Act, the value of a supply shall include any taxes, duties,
cesses, fees and charges levied under any law for the time being in force other than this Act, and the
Goods and Services Tax (Compensation to States) Act, if charged separately by the supplier:
Provided also that in cases where the penalty is leviable under the Central Goods and Services Tax
Act and the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act, the
penalty leviable under this Act shall be the sum total of the said penalties.
1
[Provided also that where the appeal is to be filed before the Appellate Authority or the Appellate
Tribunal, the maximum amount payable shall be fifty crore rupees and one hundred crore rupees
respectively.]
1. The proviso ins. by Act 32 of 2018, s. 8 (w.e.f. 1-2-2019).
17
21. Import of services made on or after the appointed day.––Import of services made on or after
the appointed day shall be liable to tax under the provisions of this Act regardless of whether the
transactions for such import of services had been initiated before the appointed day:
Provided that if the tax on such import of services had been paid in full under the existing law, no tax
shall be payable on such import under this Act:
Provided further that if the tax on such import of services had been paid in part under the existing law,
the balance amount of tax shall be payable on such import under this Act.
Explanation.––For the purposes of this section, a transaction shall be deemed to have been initiated
before the appointed day if either the invoice relating to such supply or payment, either in full or in part,
has been received or made before the appointed day.
22. Power to make rules.––
(1) The Government may, on the recommendations of the Council, by
notification, make rules for carrying out the provisions of this Act.
(2) Without prejudice to the generality of the provisions of sub-section
(1), the Government may
make rules for all or any of the matters which by this Act are required to be, or may be, prescribed or in
respect of which provisions are to be or may be made by rules.
(3) The power to make rules conferred by this section shall include the power to give retrospective
effect to the rules or any of them from a date not earlier than the date on which the provisions of this Act
come into force.
(4) Any rules made under sub-section
(1) may provide that a contravention thereof shall be liable to a
penalty not exceeding ten thousand rupees.
23. Power to make regulations.––The Board may, by notification, make regulations consistent with
this Act and the rules made thereunder to carry out the provisions of this Act.
24. Laying of rules, regulations and notifications.––Every rule made by the Government, every
regulation made by the Board and every notification issued by the Government under this Act, shall be
laid, as soon as may be, after it is made or issued, before each House of Parliament, while it is in session,
for a total period of thirty days which may be comprised in one session or in two or more successive
sessions, and if, before the expiry of the session immediately following the session or the successive
sessions aforesaid, both Houses agree in making any modification in the rule or regulation or in the
notification, as the case may be, or both Houses agree that the rule or regulation or the notification should
not be made, the rule or regulation or notification, as the case may be, shall thereafter have effect only in
such modified form or be of no effect, as the case may be; so, however, that any such modification or
annulment shall be without prejudice to the validity of anything previously done under that rule or
regulation or notification, as the case may be.
25. Removal of difficulties.––
(1) If any difficulty arises in giving effect to any provision of this Act,
the Government may, on the recommendations of the Council, by a general or a special order published in
the Official Gazette, make such provisions not inconsistent with the provisions of this Act or the rules or
regulations made thereunder, as may be necessary or expedient for the purpose of removing the said
difficulty:
Provided that no such order shall be made after the expiry of a period of 1[five years] from the date of
commencement of this Act.
(2) Every order made under this section shall be laid, as soon as may be, after it is made, before each
House of Parliament.
1. Subs. by Act 12 of 2020, s. 134, for “three years” (w.e.f. 30-6-2020).
18
