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Microlesson · 5-min read

Place of Supply - Training and Performance Appraisal Services [Section 12(5) IGST Act]

# Place of Supply: Training & Performance Appraisal

## Two-Tier Rule

Recipient's StatusPlace of Supply
RegisteredLocation of recipient
UnregisteredPlace where services are actually performed

## Who is the "Recipient"?

As per the GST Act:

  • Where consideration is payable → the person liable to pay the consideration is the recipient.
  • Where no consideration is payable → the person to whom goods/services are provided is the recipient.

### Implication for Corporate Training

If a company pays a third-party trainer to train its employees, the company (not the employees) is the recipient. So if the company is registered, PoS = location of the company.

## Practical Insight

The rule is built on the assumption that registered recipients can correctly determine the State of their input. For unregistered recipients (e.g., individual students attending a seminar), PoS pinning to performance is administratively simpler.

Worked example

### Example 1

Example — Corporate training at offsite location

ABC Ltd. (Registered in Pune) hires Mr. Mittal (Jaipur) to train its employees at a resort in Kolkata. Determine PoS.

Solution: Recipient (ABC Ltd.) is registered → PoS = Pune (location of recipient).

Variation: If ABC Ltd. is unregistered, PoS = Kolkata (place where service is performed).

⚠️ Common exam mistakes

  • Treating the trainee (employee) as the recipient instead of the paying company.
  • Defaulting to place of performance for a registered recipient — registration flips the rule.
  • Confusing this rule with Section 12(4) (restaurant/grooming etc.) which is always performance-based.
Bare-Act text Section 12(5) · IGST Act, 2017 · click to expand
Section 12(5), IGST Act: The place of supply of services in relation to training and performance appraisal to,— (a) a registered person, shall be the location of such person; (b) a person other than a registered person, shall be the location where the services are actually performed.
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