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Rule 4 of Integrated Goods and Services Tax Rules.

by | Aug 22, 2024 | GST, Integrated Goods and Services Tax Rules, 2017, Rules | 0 comments

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Important Keyword: GST, IGST, Rule 4, Section 12.

Words: 1,470; Read time: 8 minutes.

Rule 4 of IGST Rules, 2017.

The supply of services attributable to different States or Union territories, under sub section (3) of section 12 of the IGST 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.]

1. Inserted (w.e.f. 01.01.2019) by Notification No. 04/2018 Integrated Tax dated 31.12.2018.


Frequently Asked Questions

  1. What is Rule 4 of IGST Rules?

    Rule 4 of IGST Rules pertains to the determination of the time and place of supply for services, ensuring clarity in taxation and compliance for businesses.

  2. How does Rule 4 of IGST Rules affect service providers?

    Rule 4 of IGST Rules impacts service providers by outlining the conditions under which the supply of services is considered to occur, thereby influencing their tax obligations.

  3. What are the key provisions of Rule 4 of IGST Rules?

    Key provisions of Rule 4 of IGST Rules include guidelines on the place of supply, the nature of services provided, and the applicable tax rates based on the location of the supplier and recipient.

  4. Can Rule 4 of IGST Rules be applied to both domestic and international services?

    Yes, Rule 4 of IGST Rules applies to both domestic and international services, helping to clearly define the tax implications for cross-border transactions.

  5. How does Rule 4 of IGST Rules interact with other GST provisions?

    Rule 4 of IGST Rules interacts with other GST provisions by providing a framework for the time and place of supply, which is crucial for determining GST liability under the broader GST regime.

  6. What are the implications of non-compliance with Rule 4 of IGST Rules?

    Non-compliance with Rule 4 of IGST Rules can result in penalties, interest on unpaid taxes, and potential legal consequences for businesses failing to adhere to the prescribed guidelines.

  7. Is Rule 4 of IGST Rules applicable to exempt services?

    Rule 4 of IGST Rules is applicable to exempt services; however, businesses should consult relevant notifications to understand specific conditions and compliance requirements.

  8. How can businesses ensure adherence to Rule 4 of IGST Rules?

    Businesses can ensure adherence to Rule 4 of IGST Rules by maintaining accurate records of service transactions, understanding the nature of services provided, and consulting tax professionals when necessary.

  9. What role does Rule 4 of IGST Rules play in determining the place of supply?

    Rule 4 of IGST Rules plays a crucial role in determining the place of supply by establishing criteria based on the location of the service provider and the service recipient, which directly affects tax jurisdiction.

  10. Where can I find more information about Rule 4 of IGST Rules?

    More information about Rule 4 of IGST Rules can be found on the official GST portal, where detailed guidelines, notifications, and updates are regularly published for public access.

Read More: Notification No. 67/2018 – Central Tax GST: Seeks to extend the time period specified in notification No. 31/2018-CT dated 06.08.2018 for availing the special procedure for completing migration of taxpayers who received provisional IDs but could not complete the migration process.

Web Stories: Notification No. 67/2018 – Central Tax GST: Seeks to extend the time period specified in notification No. 31/2018-CT dated 06.08.2018 for availing the special procedure for completing migration of taxpayers who received provisional IDs but could not complete the migration process.

Download Pdf: https://taxinformation.cbic.gov.in/

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