Background:
The Ministry of Finance issued Press Release dated May 28, 2021 pertaining to decisions taken in 43rd GST Council meeting wherein following recommendations were made to make place of supply of B2B supply of Maintenance, Repair and Overhaul (“MRO”) Services in respect of ships/ vessels as location of recipient of service.
Following notification has been issued in this regard:
Notification:
The CBIC vide Notification No. 03/2021- Integrated Tax dated June 02, 2021 amended Notification No. 04/2019- Integrated Tax dated September 30, 2019 which notifies place of supply for certain services under Section 13(13) of the Integrated Goods and Services Tax Act, 2017 (“IGST Act”) to insert following entry:
- Inserted following entry in serial number 25 (i.e., Heading 9987) of the Services Rate Notification:
|
S. No. |
Description of services or circumstances |
Place of supply |
|
3 |
Supply of maintenance, repair or overhaul service in respect of ships and other vessels, their engines and other components or parts supplied to a person for use in the course or furtherance of business |
The place of supply of services shall be the location of the recipient of service. |
This notification shall come into force with effect from June 2, 2021.
Relevant Provision:
Section 13(13) of the IGST Act:
“13. Place of supply of services where location of supplier or location of recipient is outside India.
(13) In order to prevent double taxation or non-taxation of the supply of a service, or for the uniform application of rules, the Government shall have the power to notify any description of services or circumstances in which the place of supply shall be the place of effective use and enjoyment of a service.”
The Notification can be accessed at: https://www.cbic.gov.in/resources//htdocs-cbec/gst/notfctn-3-2021-igst-english.pdf