GST Circular No. 203/2023 – Clarification regarding determination of place of supply in various cases

GST Circular No 203/2023

In this Cicular clarification provided on following issues :-
1. Place of Supply for Transportation of Goods Issue:
Concerns raised about determining the place of supply for transportation of goods involving international service providers or recipients. Clarification: Following the recent amendment, the place of supply for transportation of goods (excluding mail and courier services) in cases with international service providers or recipients will be determined according to section 13(2) of the IGST Act. If the recipient’s location is known, the place of supply will be at the recipient’s location. If this information is unavailable, the place of supply defaults to the supplier’s location. Moreover, it’s essential to note that the place of supply for transportation of goods via mail or courier will continue to follow section 13(2) of the IGST Act. The same principles apply, utilizing the recipient’s location

when available, or defaulting to the supplier’s location if the recipient’s location is not accessible.
2. Place of Supply for Advertising Services Issue:
Uncertainty exists concerning the determination of the place of supply for advertising services, particularly when procuring space on hoardings or billboards in different states. Clarification: (i) When there’s a sale of space or rights to use space on an immovable property (like hoardings/structures) for displaying advertisements, the place of supply will be the location of that hoarding or structure, aligning with section 12(3)(a) of the IGST Act. (ii) In cases where advertising companies avail services for displaying ads on hoardings or billboards without selling space, it falls under advertisement services and is governed by Section 12(2) of the IGST Act, not covered by section 12(3)(a).
3. Place of Supply for Co-Location Services Issue:
Confusion exists regarding whether co-location services primarily involve renting immovable property or encompass broader IT infrastructure services. Clarification: Co-location services are classified as “”Hosting and IT infrastructure provisioning services.”” These services encompass physical space and various IT-related aspects like network connectivity, security, backup, and monitoring. Hence, they extend beyond just renting immovable property. The place of supply for co-location services is determined by section 12(2) of the IGST Act, which is the location of the recipient of the service. However, if the agreement restricts services to basic space and infrastructure without IT-related components, it falls under rental of immovable property, and the place of supply is the location of the immovable property.


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