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Cgst/sgst/igst structure for online services

Debashis (Director) (21 Points)

02 July 2018

Hi,

New to this forum and not from Finance background. Anything seemingly ignorant may be excused.

I would like to know the breakup of CGST/SGST/IGST for the following scenario of an online service, where no goods is physically transferred from one state to another.

For example, if there is an online newspaper or an online coaching center, which is located in a particular state and has paying customer all across the country, how will the CGST, SGST or IGST be applicable?

Let us say, the online newspaper/coaching center is based in Maharashtra and has a user located in Delhi who has paid a montly subscripttion of Rs 100.

How will the various components of GST be computed?

Any clarification would be a great help.

Thanks.

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4 Replies

prasad Nilugal ( GST Practitioner & Accounts ) (14805 Points)
Replied 02 July 2018

If your busniess is online then same will will be treated as supply of service not Goods and if you are providing your service inter-state IGST will be applicable and within sate CGST/ SGST will be applicable , this as per the section 7(3) and section 8(2) of the IGST act 2017 .

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CA Shivam Arora (Chartered Accountant) (2414 Points)
Replied 02 July 2018

The following category of service is OIDAR service governed by default section:-

The place of supply of services, except the services specified in sub-sections (3) to (14),––

(a) made to a registered person shall be the location of such person;

(b) made to any person other than a registered person shall be,––

(i) the location of the recipient where the address on record exists; and

(ii) the location of the supplier of services in other cases.

Assuming all your customers to be unregistered and you dont have the address on record of any of your customers, place of supply(POS) is location of supplier i.e. Maharashtra.

Since POS and location of supplier is in same state i.e. Maharashtra therefore CGST and SGST is chargeable.

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prasad Nilugal ( GST Practitioner & Accounts ) (14805 Points)
Replied 03 July 2018

Sir with reference to your reply Assuming all your customers to be unregistered , If any body is registerd out side sate then what will be palce of supply ?.