Page 9 - Chap24Computation of GST

the place of supply shall be the place of such installation or assembly. Therefore, in the given
case, the place of supply will be Gurugram, Haryana.
Ü Since the location of the supplier (Uttar Pradesh) and the place of supply (Haryana) are in two
different States, the same is an inter-State supply liable to IGST [Section 7(1)(a) of the IGST
Act, 2017 read with section 5(1) of that IGST Act].

3. Ü As per section 7(5)(b) of the IGST Act, 2017, supply of goods and/or services to a special
economic zone (SEZ) unit is treated to be a supply of goods and/or services in the course of
inter-State trade or commerce.

Ü Therefore, supply of goods to a SEZ unit located within the same State shall be liable to IGST
[Section 5(1) of the IGST Act, 2017].
Ü As per section 16(1)(b) of IGST Act 2017, Supply of goods or services to SEZ is a zero-rated supply &
A zero rated supply can be supplied without payment of tax under LUT as per section 16(3)(a) of

that Act.
Ü Remaining turnover will be calculated as under : -
4.
₹ 256 crore – (₹ 45 crore + ₹ 50 crore + ₹ 30 crore + ₹ 10 crore + ₹ 20 crore + ₹ 0.50 crore + ₹
0.10 crore + ₹ 0.05 crore + ₹ 0.05 crore) = ₹ 100.30 crore
Supply within the State - ₹ 100.30 crore x 3/5 = ₹ 60.18crore
Supply outside the State - ₹ 100.30 crore x 2/5 = ₹ 40.12crore

Ü Supply within the State is intra-State supply as per section 8(1) of IGST Act, 2017 and thus,
chargeable to CGST and SGST.
Ü Supply outside the State is inter - State supply chargeable to IGST [Section 7(1) of IGST Act, 2017
read with section 5(1) of the said IGST Act].

5.
Ü As per section 25(4) of the CGST Act, 2017, If more than one registration is obtained by a
person in one or more State or UT, then for each of such registration, it shall be treated as

distinct persons.
Ü Schedule I to the CGST Act, 2017 specifies situations where activities are to be treated as
supply even if made without consideration. Supply of goods and/or services between ‘distinct
persons’ as specified in section 25 of the CGST Act, 2017, when made in the course or furtherance
of business is one such activity included in Schedule I under para 2.

Ü In the given case-
Ø the location of the supplier is in Noida (Uttar Pradesh) and
Ø the place of supply is the location of such goods at the time at which the movement thereof
terminates for delivery to the recipient i.e., Delhi , as per section 10(1)(a) of the IGST Act, 2017.

Ü Therefore, the stock transfer by Noida office to Delhi branch is an inter -State supply as the
location of the supplier and the place of supply are in two different States [Section 7(1)(a) of
IGST Act, 2017]. Thus, the supply is leviable to IGST as per section 5(1) of the IGST Act, 2017.
Ü Rule 28 of the CGST Rules, 2017 prescribes the provisions to determine the value of supply of
goods or services or both between distinct or related persons, other than through an agent.

Second proviso to the said rule lays down that where the recipient is eligible for full input tax
credit, the value declared in the invoice shall be deemed to be the open market value of the goods
or services.
Ü Therefore, the value of supply in this case will be ₹ 4.5 crore and open market value and cost of

production of the goods will be irrelevant.

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