Introduction

Recent IGST Act amendments clarify clause (ca) of Section 10(1) regarding the place of supply for goods and addresses. Effective October 1, 2023, the amendment clarifies the place of supply for goods to unregistered persons with different addresses.

Key Provisions of Clause (ca)

The newly inserted clause (ca) in Section 10(1) of the IGST Act specifies:

When goods are supplied to an unregistered person, the place of supply shall be the location mentioned in the invoice.
If the invoice lacks the unregistered person’s address, the place of supply will be the supplier’s location.
The clause overrides any contrary provisions in clause (a) or clause (c) of Section 10(1).

Explanation: For the purposes of this clause, recording the name of the State of the unregistered person on the invoice is equivalent to recording the address.

Scenario Clarification

Example Situation

Consider a scenario where an unregistered person, Mr. A, from State X orders a mobile phone from an e-commerce platform. The phone is to be delivered to an address in State Y. Mr. A provides his billing address in State X. The question arises: What is the place of supply for the mobile phone—State X or State Y?

Board’s Clarification

As per the provisions of clause (ca) of Section 10(1) of the IGST Act, the place of supply in such cases is determined as follows:

The place of supply is the location as per the address recorded on the invoice.
If the delivery address differs from the billing address, we consider the delivery address on the invoice the place of supply.

In the given example, since the invoice records the delivery address as State Y, we will consider State Y the place of supply.

Practical Implications for Suppliers

Recording Delivery Address: Suppliers must record the delivery address on the invoice to accurately determine the place of supply.
E-commerce Transactions: Record the delivery address as the recipient’s address for tax purposes for goods supplied through e-commerce platforms, where the delivery and billing addresses may differ.

Conclusion

The amendment to Section 10(1) of the IGST Act, through clause (ca), simplifies the determination of the supply provisions for goods delivered to unregistered persons. Focusing on the delivery address ensures clarity and uniformity in tax implementation across different field formations.

References

Circular No.209/3/2024-GST
Notification 02/2023-Integrated Tax, dated September 29, 2023

Clarification on the Place of Supply of Goods to Unregistered Persons