Exceptions to the general principle:
(i) Services having nexus to immovable property-Place of supply shall be location of immovable property [Section 6(4)].
Services relating to immovable property are not interdependent on the location of service provider or the service receiver. The place of supply of service provided by an engineer, architect, estate agent, interior decorator and surveyor is specified as location of such property.
For example: A Delhi based businessman wish to construct a school in Bhopal. He may hire the services of Architect having usual place of residence in Mumbai. Here, the entire economic activity is culminating in the form of construction of school and such activity is taking place in Bhopal. Services in relation to immovable property are treated as supplied at the location of immovable property. Therefore, in this case the place of supply is Bhopal. The supplies that are covered under this exception are,-
a) The grant , assignment or surrender of any interest in or right over land;
b) The grant, assignment or surrender of a personal right to call for or be granted any interest in or right over land;
c) The grant, assignment or surrender of a license to occupy land or any other contractual right exercisable over or in relation to land (including the provision of holiday accommodation, tents and camping facilities);
d) Any works of construction, demolition, conversion, reconstruction, alteration, enlargement, repair or maintenance of a building or civil engineering work; and
e) It also covers the services of professionals such as estate agents, auctioneers, architects, surveyors and engineers, in so far as they are directly related to a specific site (or sites) of land. It does not apply where such services are only indirectly related to land, or where the land related service is only an incidental component of a more comprehensive service. Examples of land related services include,-
• Services of estate agents, auctioneers, architects, surveyors, engineers and similar professional people relating to land, buildings or civil engineering works and management, conveyance, survey or valuation of property by a solicitor or surveyor;
• seismic surveying and associated data processing services on land;
• services of a loss adjuster in assessing validity of an insurance claim relating to damage to land or buildings;
• legal services such as conveyancing and dealing with applications for planning permission;
• accountancy services relating to the letting of property;
• lease or hire of exhibition stand space, where the specific stand space is reserved by an individual exhibitor;
• property management, including rent collection and arranging for routine maintenance;
• interior designing in buildings;
• leases of buildings for less than 21 years (which is a supply of a service);
• provision of hotel or holiday accommodation;
• options to purchase land;
• provision of car parking, provision of space in a warehouse (whether in a designated area or not).
f) Services in the course of construction, alteration, demolition, repair or maintenance of any building or civil engineering work on land, including painting, decorating, and the supply of plant or machinery together with an operator for work on a construction site.
g)The provision in an hotel, or similar accommodation of sleeping accommodation or of accommodation in rooms which are provided in conjunction with sleeping accommodation or for the purpose of a supply of catering.
(ii) Restaurant services, catering services and other performance based services-Place of supply shall be the place of performance [section 6 (5)]
The services provided by a restaurant, beauty parlour, therapeutic massage centre, dance or drama classes or other training or coaching etc are such services which require simultaneous presence of service provider and service receiver. The place of supply of such service has been prescribed as the location where such services is performed. The restaurant and catering services are also performance based services. The place of performance of these services, and thus place of consumption thereof is readily ascertainable. The place of supply of these services will be where the services are actually performed and it is the closest proxy for determining the place of supply of these services.
(iii) The place of supply of training and performance appraisal when provided to a non-registered person- Place of supply shall be the place of performance service [Section 6(6)].
The place of supply of such services to a registered person is governed by the default rule, i.e., location of service recipient. However, in respect of B2C supply the location of such supply is the place where such services ae performed.
(iv) Admission to an event or amusement park- Place of supply shall be the place of performance service where event is held [section 6(7)].
Illustratively
A Mumbai based event manager organizes an event in Hyderabad. It allows admission to the employee of Bangalore based company in the said event. The place of supply of this service is Hyderabad as even is held there.
(v) Services relating to organizing an events when provided to a nonregistered person – Place of supply shall be the location where event is held [section 6(8)].
The place of supply of services that have direct nexus to the admission, organization and conduct of an event is determinable as the place of such event. Services covered under this sub-rule are,
• any supply of cultural, artistic, sporting, technical support, educational, or
entertainment services
• miscellaneous services relating to organizing exhibitions, conferences, or meetings
• Sporting services include
(i) individual sports persons appearing at an event for a fee (appearance money‘)
(ii) organisation of sporting events such as races and tournaments, and provision of race prepared cars to racing teams or drivers,comprising a package including the hire of the car and support services to ensure the optimum maintenance and operation of the car throughout a series of races.
• Entertainment services include of the services of an artist or performer before a live audience, or services relating to a performance. It would also include the services of a DJ or musician at a concert or event.
(vi) Goods transportation services including courier or mail when provided to a non-registered person [section 6(9)]-
Place of supply of B2C supply shall be the location where such goods are handed over for transportation. For B2B services default rule shall be followed.
(vii) Passenger transportation service when provided to a non-registered person – [section 6(10)]
Place of supply shall be the location where the passenger embarks for a continuous journey. For B2B services default rule shall be followed. Therefore in respect of a flight from Delhi to Chennai, when provided to a non-business entity, the place of supply shall be Delhi.
(viii) Services provided on board a conveyance- [Section 6(11)]
Place of supply of service provided on board a conveyance shall be the location first schedule point of departure of the conveyance.
(ix) Telecom services -Cable services/DTH services [Section 6(12)]
The place of supply of telecom company to a customer shall be determined in the following manner;
(i) in case of service by way of fixed telecom line, leased circuits, internet leased circuit shall be the state where the fixed line is made available to the user ;
(ii) In case of mobile connection for telecom and internet service provided on post-paid basis, the place of supply shall be the billing address for such service;
(iii) In case where such service is provided on pre-paid basis through a pre-paid voucher the place of supply of service shall be the state where such vouchers are sold. However, if voucher are sold on internet banking or other mode of epayment then in such cases the location/address of recipient would be available. Hence in such cases the place of supply of service be the recipient location on the record.
(iv) The place of supply of such services is determinable almost like telecom service, in the following manner.The place of supply of service by way of cable connection and direct to home connection service shall be the state where such connection is made available to the service recipient. For example Tatasky has a registered business premises in Chandigarh from where it supplies services to whole of India. Tata sky can identify, at the time of payment itself, the location of the subscriber in case of payment made, other than by way of pre-paid vouchers.
(X) The Place of supply of banking and financial services including the stock broking service shall be the location of service recipient on record. If location is not available then the location of service provider shall be the place of supply of service. [Section 6(13)]
This provision shall cover a transaction of lease/hire-purchase finance, money changing,
mutual fund service, bill discounting, credit card service, banking services, brokerageservice, demat services etc.
(XI) The Place of supply of insurance services in case of B2C transaction shall be the location of service recipient on record. For B2B services it shall be the location of recipient, i.e., default rule [Section 6(14)]
(XII) Place of supply advertisement service to the Central Government, State Government, a statutory body etc [Section 6(15)]-
The place of supply of such services shall be the state to which such service identifiable. If it is attributable to more than one state, it shall be determined in terms of contract and in absence thereof it shall be determined on reasonable basis as may be prescribed.
Illustratively
(i) A Government Department , say, Women and Child Welfare, from Delhi office hires the services of say Doordarshan, also located in Delhi for advertisement campaign across the country. The campaigns are broadcasted across the country;
(ii) Income tax department hires the service of Times of India from a centralized location for publication of advertisement in all editions across the country;
(iv) A national political party hires a service broadcasting channel or paper for dissemination of advertisement across the country.