Under the Goods and Services Tax (GST) in India, the supply of goods and services is

defined and treated differently. Here’s a detailed breakdown:

Supply of Goods under GST

Definition

Goods: Defined as every kind of movable property other than money and securities but
includes actionable claims, growing crops, grass, and things attached to or forming part of
the land which are agreed to be severed before supply or under a contract of supply.

Types of Supplies

Intra-State Supply: When the location of the supplier and the place of supply are within
the same state or union territory.

Subject to Central GST (CGST) and State GST (SGST) or Union Territory GST (UTGST).

Inter-State Supply: When the location of the supplier and the place of supply are in
different states or union territories.

Subject to Integrated GST (IGST).

Place of Supply

Domestic Supply:

Generally, the place of supply is the location where the movement of goods terminates for
delivery to the recipient.

If there is no movement of goods, the place of supply is the location of goods at the time of
delivery to the recipient.

International Supply:

Export: Place of supply is the location outside India.

Import: Place of supply is the location of the importer in India.

Time of Supply

Time of supply is crucial for determining when the goods are subject to GST. It is the
earliest of:

Date of issue of invoice

Last date on which the invoice should have been issued.

Date of receipt of payment.

Supply of Services under GST

Definition

Services: Defined as anything other than goods, money, and securities but includes
activities relating to the use of money or its conversion by cash or by any other mode, from
one form, currency, or denomination to another form, currency, or denomination for which
a separate consideration is charged.

Types of Supplies

Intra-State Supply: When the location of the supplier and the place of supply are within
the same state or union territory.

Subject to Central GST (CGST) and State GST (SGST) or Union Territory GST (UTGST).

Inter-State Supply: When the location of the supplier and the place of supply are in
different states or union territories.

Subject to Integrated GST (IGST).

Place of Supply

Domestic Supply:

Generally, the place of supply for services is the location of the recipient if the address on
record exists. Otherwise, it is the location of the supplier.
Specific Cases:

Services related to immovable property: Place of supply is where the immovable

property is located.

Performance-based services (like personal services): Place of supply is where the

services are actually performed.

Admission to events: Place of supply is where the event is actually held.

International Supply:

Export: Place of supply is the location outside India.

Import: Place of supply is the location of the recipient in India.

Time of Supply

Time of supply is crucial for determining when the services are subject to GST. It is the
earliest of:

Date of issue of invoice.

Date of provision of service (if the invoice is not issued within the prescribed period).

Date of receipt of payment.

Key Differences between Supply of Goods and Services

Movement:

Goods: Often involves physical movement.

Services: Typically do not involve physical movement.

Invoice and Payment:

Goods: Time of supply often linked to the issuance of the invoice and movement of goods.

Services: Time of supply often linked to the provision of service and issuance of the invoice.

Place of Supply Rules:

Goods: Place of supply often based on the location of goods at the time of delivery.

Services: Place of supply often based on the location of the recipient or specific place
related to the service.

Compliance and Documentation

Invoicing:

Must issue a tax invoice for every supply of goods or services.

Invoice must include details like the supplier’s and recipient’s GSTIN, description of
goods/services, quantity, value, tax rate, and amount of tax charged.

Returns:

Regular filing of returns like GSTR-1, GSTR-3B, and annual returns.

Accurate reporting of the nature of supply (goods or services) is crucial.

Input Tax Credit (ITC):

ITC on goods and services can be claimed if used for business purposes.

Proper documentation and compliance are essential for claiming ITC.

Conclusion

Understanding the distinctions and compliance requirements for the supply of goods and
services under GST is crucial for businesses. Proper adherence to place and time of supply
rules, invoicing, and documentation ensures smooth GST operations and avoids penalties.