1[Rule 4 - Place of supply of services relating to immovable property in more than one state [Corresponding Section12(3)]
The supply of services attributable to different States or Union territories, under sub section (3) of section 12 of the Integrated Goods and Services Tax 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 Vide: Notification
No.04/2018-Integrated Tax dt.31/12/2018 [Para3]