Issue for place of sUPPLY

This query is : Resolved

shaik nayaz (Querist)
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21 April 2023 sir/ madam

the client is engaged in umblical cord storage services . The client is having multi state operations i.e andhra pradesh, telangana , karnataka. The client is having storage facility in karnataka only. the client normally bills invoices from each state separately for the conecrned state customers. once the customers approaches for the facility.

1. then the client will give suggestions for food habits , regulars excecises to be done to have problem free delivery of the baby.

2. At the time of delivery , the client present at the hospital and cuts the umblical cord under high sterized conditons of the baby delivered.

3. after extraction of the umblical cord, the umblical cord will be processed and stored in high sterilized bag .

4. The bag will be sent to the storage facility ( karnataka ) for further processing and storage upto 21 years.

5. when ever the baby or any family member of baby suffers from any chronic disease , then the customer will approach the client , then the client will get umblical cord from the storage facility ( karnataka) to the client office ( telangana) and gives back to the customer.

6. The main point in the agreement between client and customer is , when ever the customer needs the sample, the same should be delivered to the customer place where the original transaction took place. for example ; at the time of contract, if the customer is from telangana , then the contract will made between client's telangana office and customer. the sample will be then sent for storage facility at karnataka. whenever the customer needs the sample , then client ( telangana office ) will get the sample from karnataka storage facility and will deliver the sample to the customer in telangana.

now my question is ;

1. what is the place of service if the client is having office at telangana and customer from telangana ( client biils the invoice from telangana office ) but client having storage facility in karnataka.

2. can i treat the above service in line with "COLD STORAGE FACILITY", where it is mentioned that the place of service ends in a place where the movement of the goods terminated for customer i.e telangana.

pls provide the response along with concerned rules in the act and case laws if any.

Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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09 July 2024 Based on the information provided, let's address your questions regarding the place of service and the classification of the service:

**1. Place of Service:**
In the scenario where the client has an office in Telangana and the customer is also from Telangana, but the storage facility is in Karnataka, determining the place of service is crucial for GST (Goods and Services Tax) purposes. According to GST rules (Section 12 and Section 13 of the IGST Act, 2017), the place of supply for services is generally where the recipient is located.

Here’s the breakdown:
- **Service Type**: The service involves storage of umbilical cord blood and its subsequent retrieval for medical purposes.
- **Customer Location**: The customer (recipient of service) is in Telangana.
- **GST Implication**: Since the service is provided to a customer in Telangana, the place of supply of this service would be Telangana, as per Section 12(2)(a) of the IGST Act, 2017.

Therefore, even though the storage facility is in Karnataka, the place of service (place of supply) for GST purposes would be Telangana because that is where the recipient of the service is located.

**2. Classification of Service:**
Regarding whether this service can be treated akin to "COLD STORAGE FACILITY," where the place of service ends at the location where goods are delivered to the customer (Telangana), it's essential to consider the nature of the service provided.

- **Cold Storage Facility**: This typically refers to services where goods are stored in a controlled environment (such as refrigerated storage) and retrieved as needed by customers. The GST treatment under such services ensures that the place of service ends at the location where the goods are delivered to the customer.

- **Umbilical Cord Storage**: While not exactly like cold storage of goods, the principle can be somewhat analogous because the umbilical cord sample is stored until needed by the customer for medical purposes.

Given the specifics of your client's service:
- The umbilical cord is stored in Karnataka.
- It is retrieved and delivered to the customer's location in Telangana when needed.

This retrieval and delivery to the customer in Telangana align with the concept of service ending where the goods (umbilical cord sample) are delivered to the customer. Therefore, the service can be reasonably aligned with the principles applied to cold storage facilities in terms of GST place of supply.

**Conclusion:**
1. **Place of Service**: For GST purposes, the place of service (place of supply) is Telangana, where the recipient of the service (customer) is located, even though the storage facility is in Karnataka.

2. **Classification of Service**: While not identical, the principles for determining the place of service in cold storage facilities can be applied analogously to your client's service, considering the delivery of the stored umbilical cord sample to the customer's location in Telangana.

For precise compliance and to ensure correct application of GST rules, it's advisable to consult with a qualified tax professional or GST consultant who can provide tailored advice based on the specific circumstances and latest GST regulations in India.