GST – CBIC issued clarification on the entitlement of input tax credit where the place of supply is determined in terms of the proviso to sub-section (8) of section 12 of the IGST Act [Circular attached]
Circular No. 184/16/2022-GST dated 27 December 2022
Key Pointers –
- As per Section 12 (8) of the IGST Act when the goods transported to a place outside India, the place of supply of the said service shall be the place of destination of such goods, doubts are being raised regarding the availability of input tax credit of the said services to the recipient located in India.
- It has been clarified that in case of supply of services by way of transportation of goods, including by mail or courier, where the transportation of goods is to a place outside India, and where the supplier and recipient of the said supply of services are located in India, the place of supply is the concerned foreign destination where the goods are being transported, in accordance with the proviso to the sub-section (8) of section 12 of IGST Act.
- Such supply of services would be considered as inter-State supply in terms of sub-section (5) of section 7 of the IGST Act since the location of the supplier is in India and the place of supply is outside India. Therefore, integrated tax (IGST) would be chargeable on the said supply of services.
- The recipient of service of transportation of goods shall be eligible to avail input tax credit in respect of the IGST so charged by the supplier, subject to the fulfilment of other conditions laid down in section 16 and 17 of the CGST Act.
- The supplier of service shall report place of supply of such service by selecting State code as ‘96-Foreign Country’ from the list of codes in the drop-down menu available on the portal in FORM GSTR-1.