According to Section 7(3)(a) of the IGST Act, 2017 if the location of the supplier and place of

supply are in different states then supply of services would be considered as Inter-State trade or
commerce

Section 12(8) of the IGST Act, 2017 deals with supply of service by way of transportation of
goods in relation to registered as well as non registered person. In case of registered person, it
shall be the location of such person whereas in other case it shall be the location at which goods
are handed over for their transportation.

According to Section 2(24) of the IGST Act, 2017 if any words and expression are not defined
then it has to be referred in CGST Act so referring Section 2(94) of the CGST Act which defines
registered person. Registered person means person who is registered under section 25 fulfilling
certain criteria meaning there is a chances that person has registered office in one state and he is
registered under GST in another state because here registered person means person registered
under GST which has nothing to do with his registered office.

Now coming to the present problem, if we assume that the consignee is registered in Karnataka
then considering section 12(8)(a) of the IGST Act, 2017 IGST will be lieved on the transaction
because the location of the supplier i.e trichy and place of supply i.e. Karnataka are different.
Hence IGST would be charged.

But considering the problem otherwise, if we assume that the consignee is not registered in
Karnataka the referring to section 12(8)(b) of the IGST Act, 2017 IGST would be lieved on the
transaction because in case of non registered person place of supply is considered as location at
which goods are handed over for their transportation which in the present case would be
coimbatore. So the location of supplier i.e. trichy and place of supply i.e. Coimbatore are in the
same state and thus falls under Intra state transaction. Hence IGST would not be charged.

2. Section 14 of the IGST Act, 2017 says “On supply of online information and database access
or retrieval services by any person located in a non-taxable territory and received by a non-
taxable online recipient, the supplier of services located in a non-taxable territory shall be the
person liable for paying integrated tax on such supply of services”
Section 2(17) of the Act defines online information and database access or retrieval services as
“services whose delivery is mediated by information technology over the internet or an
electronic network and the nature of which renders their supply essentially automated and
involving minimal human intervention and impossible to ensure in the absence of information
technology and includes electronic services”

And also 2(16) defines non-taxable online recipient “any Government, local authority,
governmental authority, an individual or any other person not registered and receiving online
information and database access or retrieval services in relation to any purpose other than
commerce, industry or any other business or profession, located in taxable territory.”

So coming to the present situation and following section 14 of the IGST Act, 2017, app based
service provided by the Netflix Netherland i.e. non taxable territory falls under online
information and database access or retrieval services as it provides online supply of digital
content like videos and services are being received by Shriram who is non taxable online
recipient. Therefore IGST would be lieved on the supply of services provided by the Netflix
Netherland to Shriram.

3. According to section 2(24) of the IGST Act, 2017 if any words and expression are not defined
then it has to be referred in CGST Act so referring section 7(1) of the CGST Act which defines
supply of services wherein consideration is the important factor. Section 2(31) of the CGST Act
defines consideration. Schedule I attached to Section 7(1) Of the CGST Act lists down certain
services which are considered as service even without consideration wherein one such category
transaction between related party in the furtherance of business.

In the present case at hand there is no supply of service by Srivats as there is no consideration
and even if we consider Schedule I which talks about supply of services without consideration
ten in such scnerio also the above transaction is not done in the furtherance of business.
Therefore there is no supply of services which consequently does not lead to Inter state supply.
Hence IGST cannot be lieved.