EXAMPLE-63

ABC & Co. of Jammu & Kashmir rendered taxable services both within and outside the State of J& K. It received Rs 1245000 for the services rendered inside the State of  J& K and Rs.1000000 outside the State of J& K (i.e. service is provided in Delhi). Whether GST is liable on these supplies.

Answer

According to section 1(2) of CGST Act, this Act extends to the whole of India except the State of Jammu and Kashmir.

Definition of taxable territory under section 2(109) defines that taxable territory' means the territory to which the provisions of this Act apply;

Non-taxable territory definition under section 2(79) provides that non-taxable territory' means the territory which is outside the taxable territory;

Thus, Jammu and Kashmir is a non-taxable territory.

(i)                 Service rendered in J&K will not be liable for GST, thus, service of Rs 12,45,000 rendered inside the J&K is not liable for GST .

(ii)               Service rendered by a person in J&K to the recipient outside J&K. i.e. located in Delhi according to our example would be subject to GST on reverse charge basis.

In case Taxable services provided or agreed to be provided by any person who is located in a non-taxable territory and received by any person located in the taxable territory other than non-assessee online recipient (OIDAR) is under reverse charge and person liable to pay GST is the recipient for such services.[ SERVICES UNDER REVERSE CHARGE AS APPROVED BY GST COUNCIL]. Hence In the above transaction recipient is liable to pay 100 % GST under reverse charge on Rs 1245000.

This solution is not applicable currently, as the provisions of CGST Act also extends to Jammu & Kashmir now. So services rendered whether inside or outside J&K, shall be liable to GST. So ABC & Co. shall pay GST on total supplies.