Summary of Place of Supply in case of goods sold to unregistered person
The government has clarified the Place of Supply in case of goods sold to unregistered person by Circular No 209/3/2024 dated 26-06-2024. The new rule clause (ca) has been added to the IGST Act. This rule states that when goods are sold to an unregistered person, the place of supply depends on the address on the invoice.
- if the buyer’s address is mentioned on the invoice then the place of supply will be the buyer’s location
- if there is no address on the invoice, the place of supply will be the location of the seller.
The new rule (clause ca) added to the IGST Act says that when goods are sold to unregistered person the place of supply will be determined by the address on the invoice. if no address is recorded the seller’s location will be considered the place of supply.Additionally, it is clarified that if only the state of the buyer is mentined on the invoice, it will be considered as the buyer’s address for determining the place of supply.
The Business have raised concern about situations where the billing address is different from the delievery address, particulary when sales happen through e- commerce platforms. They are seeking clarification on how to determine the correct place of supply in such cases.
Issue : Mr A is unregistered person from state X orderes a mobile phone from an e-commerce platform to be delievered to state Y. The Billing address is in state X, and the delievery address is in state Y. Now the question is what is place of supply – State X (billing address) or State Y (delievery address)?
Clarification : As per the new rule of clause (ca) of section 10(1) of IGST Act, the place of supply will be the delievery address recorded on the invoice, i.e State Y if the billing and delievery address are different, the supplier can use the delievery address as the recipients address as the recipient ‘s address for determining the place of supply.
