The Central Board of Indirect Taxes and Customs (CBIC) specified that the entitlement of ITC in which the supply place is defined for the proviso to sub-section (8) of section 12 of the Integrated Goods and Services Tax Act, 2017.
Under clause (a) of the mentioned subsection, the supply place of the services through the method of the goods transportation via the mail or courier to the enrolled individual would be the location of the same enrolled individual. But the proviso to the mentioned sub-section which was inserted vide the Integrated Goods and Services Tax (Amendment) Act, 2018 which comes into force from the date 01.02.2019 furnished that, the goods transportation would be the place outside India, the supply place of the specified services would be the destination place of these goods. In these cases since the supply place of services under the proviso to sub-section (8) of section 12 of the IGST Act referred to the foreign destination and not the state in which the recipient would enrol under GST, the doubts would be asked for the ITC availability of the mentioned services to the recipient who is located in India.
For ensuring transparency constancy and clarification of the problems, the council actioned their powers provided under section 168 (1) of the Central Goods and Services Tax Act, 2017, the CBIC specified that for the supply of services via the goods transportation along with the mail or courier in which the goods transportation would be the place outside India and in which the supplier and the recipient of the mentioned supply of services are located in India, the supply place would be related to the foreign destination in which the goods are transported, as per the proviso to the sub-section (8) of section 12 of IGST Act, which was inserted vide the Integrated Goods and Services Tax (Amendment) Act, 2018 which come into force from the date 01.02.2019.
Section 16 of the CGST act provides the eligibility along with the conditions to avail of ITC section 17 of the CGST act furnishes for the appointment of the credit and restricted the credits beneath the conditions mentioned in it. The stated provisions of the law do not limit the claim of GST ITC to the recipient located in India when the supply place of the said input services is located outside India. Hence the recipient of services referred to the goods transportation would be qualified for the ITC related to the IGST imposed via the supplier as per the meeting of the additional conditions counted under sections 16 and 17 of the CGST Act.
The circular specified that the supplier of service would report the place of supply of the same service by choosing the State code as ‘96- Foreign Country’ from the list of codes in the dropdown menu available on the portal in FORM GSTR-1.
