[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)]
Government of India
Ministry of Finance
(Department of Revenue)
[Central Board of Indirect Taxes and Customs]
Notification No.04/2018 - Integrated Tax
New Delhi, the 31st December, 2018
10 Pausha,1940 Saka
G.S.R.- (E). - In exercise of the powers conferred by sub-sections (3),(7) and (11) of section 12 and sub section (7) of section 13 read with section 22 of the Integrated Goods and Services Tax Act , 2017 (13 of 2017), the Central Government hereby makes the following rules to further amend the Integrated Goods and Services Tax Rules, 2017, namely:-
1. Short title and commencement.- (1) These rules may be called the Integrated Goods and Services Tax (Amendment) Rules, 2018.
(2) They shall be deemed to have come into force on the 1st day of January, 2019.
2. In the Integrated Goods and Services Tax Rules, 2017 (hereinafter referred to as the said rules), in rule 3 in clause (h), after the words “in the case of advertisements over internet” the words “the service shall be deemed to have been provided all over India and” shall be inserted.
3.In the said rules, after rule 3, the following rules shall be inserted, namely: -
“ 4. The supply of services attributable to different States or Union territories, under sub section (3) of section 12 of the Integrated Goods and Services Tax Act, 2017 (hereinafter in these rules referred to as the said Act), in the case of-
(a) services directly in relation to immovable property,
including services provided by architects, interior decorators, surveyors,
engineers and other related experts or estate agents, any service provided by
way of grant of rights to use immovable property or for carrying out or
co-ordination of construction work; or
(b) lodging accommodation by a hotel, inn, guest house, homestay, club or
campsite, by whatever name called, and including a houseboat or any other vessel
; or
(c) accommodation in any immovable property for organising any marriage or
reception or matters related thereto, official, social, cultural, religious or
business function including services provided in relation to such function at
such property; or
(d) any services ancillary to the services referred to in clauses (a), (b) and
(c),
where such immovable property or boat or vessel is located in more than one
State or Union territory, shall be taken as being in each of the respective
States or Union territories, and in the absence of any contract or agreement
between the supplier of service and recipient of services for separately
collecting or determining the value of the services in each such State or Union
territory, as the case maybe, shall be determined in the following manner
namely:-
(i) in case of services provided by way of lodging accommodation by a hotel,
inn, guest
house, club or campsite, by whatever name called (except cases where such
property is a
single property located in two or more contiguous States or Union territories or
both) and
services ancillary to such services, the supply of services shall be treated as
made in each
of the respective States or Union territories, in proportion to the number of
nights stayed
in such property;
(ii) in case of all other services in relation to immovable property including
services by way
of accommodation in any immovable property for organising any marriage or
reception
etc., and in cases of supply of accommodation by a hotel, inn, guest house, club
or
campsite, by whatever name called where such property is a single property
located in
two or more contiguous States or Union territories or both, and services
ancillary to such
services, the supply of services shall be treated as made in each of the
respective States or
Union territories, in proportion to the area of the immovable property lying in
each State
or Union territory;
(iii) in case of services provided by way of lodging accommodation by a house
boat or any
other vessel and services ancillary to such services, the supply of services
shall be treated
as made in each of the respective States or Union territories, in proportion to
the time
spent by the boat or vessel in each such State or Union territory, which shall
be
determined on the basis of a declaration made to the effect by the service
provider.
Illustration 1: A hotel chain X charges a consolidated sum of Rs.30,000/- for
stay in its two establishments in Delhi and Agra, where the stay in Delhi is for
2 nights and the stay in Agra is for 1 night. The place of supply in this case
is both in the Union territory of Delhi and in the State of Uttar Pradesh and
the service shall be deemed to have been provided in the Union territory of
Delhi and in the State of Uttar Pradesh in the ratio 2:1 respectively. The value
of services provided will thus be apportioned as Rs.20,000/- in the Union
territory of Delhi and Rs.10,000/- in the State of Uttar Pradesh .
Illustration 2: There is a piece of land of area 20,000 square feet which is
partly in State S1 say 12,000 square feet and partly in State S2, say 8000
square feet. Site preparation work has been entrusted to T. The ratio of land in
the two states works out to 12:8 or 3:2 (simplified). The place of supply is in
both S1 and S2. The service shall be deemed to have been provided in the ratio
of 12:8 or 3:2 (simplified) in the States S1 and S2 respectively. The value of
the service shall be accordingly apportioned between the States.
Illustration 3: A company C provides the service of 24 hours accommodation in a
houseboat, which is situated both in Kerala and Karnataka inasmuch as the guests
board the house boat in Kerala and stay there for 22 hours but it also moves
into Karnataka for 2 hours (as declared by the service provider). The place of
supply of this service is in the States of Kerala and Karnataka. The service
shall be deemed to have been provided in the ratio of 22:2 or 11:1 (simplified)
in the states of Kerala and Karnataka, respectively. The value of the service
shall be accordingly apportioned between the States.
5. The supply of services attributable to different States or Union territories,
under sub-section (7) of
section 13 of the said Act, in the case of-
(a) services provided by way of organisation of a cultural, artistic, sporting,
scientific, educational or entertainment event , including supply of services in
relation to a conference, fair exhibition, celebration or similar events; or
(b) services ancillary to the organisation of any such events or assigning of
sponsorship to such events ,
where the services are supplied to a person other than a registered person, the
event is held in India in more than one State or Union territory and a
consolidated amount is charged for supply of such services, shall be taken as
being in each of the respective States or Union territories, and in the absence
of any contract or agreement between the supplier of service and recipient of
services for separately collecting or determining the value of the services in
each such State or Union territory, as the case maybe, shall be determined by
application of the generally accepted accounting principles.
Illustration: An event management company E has to organise some promotional
events in States S1 and S2 for a recipient R. 3 events are to be organised in S1
and 2 in S2. They charge a consolidated amount of Rs.10,00,000from R. The place
of supply of this service is in both the States S1 and S2. Say the proportion
arrived at by the application of generally accepted accounting principles is
3:2. The service shall be deemed to have been provided in the ratio 3:2 in S1
and S2 respectively. The value of services provided will thus be apportioned as
Rs. 6,00,000/- in S1 and Rs. 4,00,000/- in S2 .
6. The supply of services attributable to different States or Union territories,
under sub
section (11) of section 12 of the said Act, in the case of supply of services
relating to a leased
circuit where the leased circuit is installed in more than one State or Union
territory and a
consolidated amount is charged for supply of such services, shall be taken as
being in each of the
respective States or Union territories, and in the absence of any contract or
agreement between
the supplier of service and recipient of services for separately collecting or
determining the value
of the services in each such State or Union territory, as the case maybe, shall
be determined in
the following manner, namely:-
(a) The number of points in a circuit shall be determined in the following
manner:
(i) in the case of a circuit between two points or places, the starting point or
place of the
circuit and the end point or place of the circuit will invariably constitute two
points;
(ii) any intermediate point or place in the circuit will also constitute a point
provided that
the benefit of the leased circuit is also available at that intermediate point;
(b) the supply of services shall be treated as made in each of the respective
States or Union
territories, in proportion to the number of points lying in the State or Union
territory.
Illustration 1: A company T installs a leased circuit between the Delhi and
Mumbai offices of a company C. The starting point of this circuit is in Delhi
and the end point of the circuit is in Mumbai. Hence one point of this circuit
is in Delhi and another in Maharashtra. The place of supply of this service is
in the Union territory of Delhi and the State of Maharashtra. The service shall
be deemed to have been provided in the ratio of 1:1 in the Union territory of
Delhi and the State of Maharashtra, respectively.
Illustration 2: A company T installs a leased circuit between the Chennai,
Bengaluru and Mysuru offices of a company C. The starting point of this circuit
is in Chennai and the end point of the circuit is in Mysuru. The circuit also
connects Bengaluru. Hence one point of this circuit is in Tamil Nadu and two
points in Karnataka. The place of supply of this service is in the States of
Tamil Nadu and Karnataka. The service shall be deemed to have been provided in
the ratio of 1:2 in the States of Tamil Nadu and Karnataka, respectively.
Illustration 3: A company T installs a leased circuit between the Kolkata, Patna
and Guwahati offices of a company C. There are 3 points in this circuit in
Kolkata, Patna and Guwahati. One point each of this circuit is, therefore, in
West Bengal, Bihar and Assam. The place of supply of this service is in the
States of West Bengal, Bihar and Assam. The service shall be deemed to have been
provided in the ratio of 1:1:1 in the States of West Bengal, Bihar and Assam,
respectively.
7. The supply of services attributable to different States or Union territories,
under sub-section (7) of
section 13 of the said Act, in the case of 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, or in the case of 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, where the location of the supplier of
services or the location of the recipient of services is outside India, and
where such services are supplied in more than one State or Union territory,
shall be taken as being in each of the respective States or Union territories,
and the proportion of value attributable to each such State and Union territory
in the absence of any contract or agreement between the supplier of service and
recipient of services for separately collecting or determining the value of the
services in each such State or Union territory, as the case maybe, shall be
determined in the following manner, namely:-
(i) in the case of services supplied on the same goods, by equally dividing the
value of the
service in each of the States and Union territories where the service is
performed;
(ii) in the case of services supplied on different goods, by taking the ratio of
the invoice value
of goods in each of the States and Union territories, on which service is
performed, as the
ratio of the value of the service performed in each State or Union territory;
(iii) in the case of services supplied to individuals, by applying the generally
accepted
accounting principles.
Illustration-1: A company C which is located in Kolkata is providing the
services of testing of a dredging machine and the testing service on the machine
is carried out in Orissa and Andhra Pradesh. The place of supply is in Orissa
and Andhra Pradesh and the value of the service in Orissa and Andhra Pradesh
will be ascertained by dividing the value of the service equally between these
two States.
Illustration-2: A company C which is located in Delhi is providing the service
of servicing of two cars belonging to Mr. X. One car is of manufacturer J and is
located in Delhi and is serviced by its Delhi workshop. The other car is of
manufacturer A and is located in Gurugram and is serviced by its Gurugram
workshop . The value of service attributable to the Union Territory of Delhi and
the State of Haryana respectively shall be calculated by applying the ratio of
the invoice value of car J and the invoice value of car A, to the total value of
the service.
Illustration-3: A makeup artist M has to provide make up services to an actor A.
A is shooting some scenes in Mumbai and some scenes in Goa. M provides the
makeup services in Mumbai and Goa. The services are provided in Maharashtra and
Goa and the value of the service in Maharashtra and Goa will be ascertained by
applying the generally accepted accounting principles.
8. The proportion of value attributable to different States or Union
territories, under sub-section (7) of
section 13 of the said Act, in the case of
supply of services 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, where the location of the supplier of services or the location of
the recipient of services is outside India, and where such services are supplied
in more than one State or Union territory, in the absence of any contract or
agreement between the supplier of service and recipient of services for
separately collecting or determining the value of the services in each such
State or Union territory, as the case maybe, shall be determined by applying the
provisions of rule 4, mutatis mutandis.
9. The proportion of value attributable to different States or Union
territories, under sub-section (7) of
section 13 of the said Act, in the case of
supply of services 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, where the location of the supplier
of services or the location of the recipient of services is outside India, and
where such services are provided in more than one State or Union territory , in
the absence of any contract or agreement between the supplier of service and
recipient of services for separately collecting or determining the value of the
services in each such State or Union territory, as the case maybe, shall be
determined by applying the provisions of rule 5, mutatis mutandis".
[F. No. 20/06/16/2018-GST]
(Dr. Sreeparvathy S.L.)
Under Secretary to the Government of India