The 53rd GST (Goods and Services Tax) council has clarified the place of supply for Custodial Services provided by Indian Banks to Foreign Portfolio Investors. The detailed clarification will be issued by the CBIC soon.
The meeting was chaired by Smt. Nirmala Sitharaman, the Union Finance Minister and Minister of Corporate Affairs, also accompanied by the Revenue Secretary, CBIC Chairman..etc.
Also read: GST Council Recommends Lowering B2C Inter-State Invoice Reporting in GSTR 1 Threshold to Rs. 1 Lakh
The council has clarified that the place of supply of Custodial Services provided by Indian Banks to Foreign Portfolio Investors is determinable under Section 13(2) of the IGST Act, 2017.
The press release stated as follows :
“Clarification on the place of supply applicable for custodial services provided by banks:
The Council recommended to clarify that place of supply of Custodial services supplied by Indian Banks to Foreign Portfolio Investors is determinable as per Section 13(2) of the IGST Act, 2017.”
The Section 13 of the IGST Act deals with Place of supply of services where location of supplier or location of recipient is outside India. Further, the sub-section 2 states that :
“The place of supply of services except the services specified in sub-sections (3) to (13) shall be the location of the recipient of services:
Provided that where the location of the recipient of services is not available in the ordinary course of business, the place of supply shall be the location of the supplier of services.”
The GST council also restricted the IGST refund in cases where export duty is payable. Also, it recommended introducing IGST refund mechanisms when the price of the goods increase subsequent to their export.
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