Place of Supply for Services of Immovable Property

We have already covered the place of supply for goods and place of supply of general services in our previous articles. For services related to immovable property, however, separate rules apply.

What is an Immovable Property?

An immovable property is defined as a fixed asset that cannot be moved without destroying or altering it. Examples include:

• Land or a piece of land
• Houses and premises
• Property rights (e.g., inheritable building rights)
• Associated goods and chattels (if located on, below, or with a fixed address)

Taxability of Services of Immovable Property

Before GST: Service Tax was applicable on taxable services provided in relation to an immovable property.
After GST: GST has replaced service tax. The applicable GST depends on whether the supply is intra‑state or inter‑state. This is determined by establishing the place of supply for the service.

Place of Supply for Services of Immovable Property

For services provided in relation to an immovable property, the place of supply is the location of the immovable property itself. This means:

• GST is levied as CGST and SGST.
• If the immovable property (or vessel/boat) spans more than one state, all those states are considered the place of supply, and GST is apportioned among them in proportion to the service value.

Examples of Place of Supply for Immovable Property Services

The table below illustrates how the place of supply is determined in different scenarios:

Example	Scenario	Place of Supply	GST Applicable	ITC Implications
Hotel Accommodation	A registered person (e.g., Akash Electronics) receives hotel services in a state different from their registration (service in Maharashtra, registered in Gujarat).	Maharashtra (location of the property)	CGST + SGST	Maharashtra SGST credit cannot be set off against Gujarat output; input CGST may be adjusted against output CGST.
Hotel Accommodation	A similar scenario for a different client (e.g., Mrs. Bagchi).	Location of the property where the service is provided	CGST + SGST	Same ITC restriction applies—credit in one state cannot be used to offset liability in another.

Input Tax Credit (ITC) for Services Related to Immovable Property

The key point is that the place of supply for services related to an immovable property is the location of the property. As a result, GST is levied as CGST and SGST. Input tax credit is state-specific; for example, if Akash Electronics is registered in Gujarat but receives services in Maharashtra, it pays CGST and SGST based on Maharashtra’s rates. The Maharashtra SGST credit cannot be set off against Gujarat’s output SGST, though the input CGST credit can be adjusted against output CGST.

Conclusion

This guide illustrates the rules for determining the place of supply for services of immovable property under GST, including detailed examples and ITC implications. For further assistance or any queries regarding GST compliance for property-related services, please feel free to contact DisyTax. We’re here to help you navigate GST complexities with clarity and confidence.