CBIC clarifies Place of Supply as Delivery Address for Unregistered buyers with different Billing Address in e-com Transactions [Read Circular]
The circular provides clarification on place of supply to unregistered persons with different billing and delivery addresses
CBIC – Unregistered Buyers – E-commerce Transactions – Central Board of Indirect Taxes and Customs – taxscan
CBIC – Unregistered Buyers – E-commerce Transactions – Central Board of Indirect Taxes and Customs – taxscan
The Central Board of Indirect Taxes and Customs ( CBIC ) has issued Circular No. 209/3/2024-GST, providing a clarification on the provisions of clause (ca) of Section 10(1) of the Integrated Goods and Service Tax ( IGST ) Act, 2017. This circular, dated June 26, 2024, aims to address ambiguities regarding the place of supply of goods to unregistered persons, particularly in e-commerce transactions.
Effective from October 1, 2023, clause (ca) was added to Section 10(1) of the IGST Act. It specifies that the place of supply for goods delivered to an unregistered person will be the location mentioned in the invoice. If the address is not provided, the supplier's location will be used.
The new clause overrides the previous provisions under Section 10(1)(a) or 10(1)(c). It includes an explanation that recording the name of the recipient's state in the invoice is sufficient to be considered as recording the address.
In cases where an unregistered person places an order with different billing and delivery addresses, the place of supply will be the delivery address recorded in the invoice.
Suppliers are advised to use the delivery address as the recipient's address on the invoice to determine the place of supply.
The circular clarified that, “As per the provisions of clause (ca) of subsection (1) of section 10 of IGST Act, where the supply of goods is made to an unregistered person, the place of supply would be the location as per the address of the said person recorded in the invoice and the location of the supplier where the address of the said person is not recorded in the invoice.
Further, as per Explanation to the said clause, recording the name of the State of the said unregistered person on the invoice shall be deemed to be the recording of the address of the said person.
Accordingly, it is clarified that in such cases involving supply of goods to an unregistered person, where the address of delivery of goods recorded on the invoice is different from the billing address of the said unregistered person on the invoice, the place of supply of goods in accordance with the provisions of clause (ca) of sub-section (1) of section 10 of IGST Act, shall be the address of delivery of goods recorded on the invoice i.e. State Y in the present case where the delivery address is located.
Also, in such cases involving supply of goods to an unregistered person, where the billing address and delivery address are different, the supplier may record the delivery address as the address of the recipient on the invoice for the purpose of determination of place of supply of the said supply of goods.”
For Example, when Mr. A, an unregistered person in State X, orders a mobile phone via an e-commerce platform to be delivered to State Y, with billing to State X, the place of supply, according to the new clause (ca), will be State Y, where the delivery address is located.
To Read the full text of the Circular CLICK HERE
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