What is Consequences of incorrect Place of Supply in GST?
Nexa Consultancy | Startup & Finance Glossary
Charging the wrong type of GST (e.g., charging CGST/SGST instead of IGST) due to an incorrect determination of Place of Supply leads to a situation where you have paid tax to the wrong government. You will have to pay the correct tax (e.g., IGST) and then claim a refund for the tax paid incorrectly, leading to a blocked working capital.
Startup Example: A consultant in Maharashtra provides a service to a client in Karnataka but wrongly charges CGST/SGST. They must now pay IGST on the transaction and go through a refund process for the wrongly paid tax.
Our GST advisory services help determine the correct Place of Supply.