This circular provides clarification regarding the place of supply of custodial services rendered by banks or financial institutions to Foreign Portfolio Investors (FPIs) under the Integrated Goods and Services Tax Act, 2017 (IGST Act).

It explains that custodial services—such as safekeeping of securities, maintaining securities accounts, collecting benefits, and reconciling records—do not fall within the scope of services provided to an “account holder” under Section 13(8)(a) of the IGST Act, as these services are not linked to accounts bearing interest (like deposit or NRE/NRO accounts).

Drawing reference from the Education Guide under the erstwhile Service Tax regime, it reiterates that custodial and related services were specifically excluded from the category of services provided to account holders. Therefore, such services are not covered by Section 13(8)(a) of the IGST Act but instead fall under the default rule in Section 13(2), meaning the place of supply will be determined based on the location of the service recipient when known.