Place of Supply in GST: Meaning, Rules, Examples, and Types

In summary

Place of supply in GST is the location prescribed under the Integrated Goods and Services Tax (IGST) Act, 2017 for determining the tax treatment of a supply. The applicable rule depends on the nature of the goods or services and the transaction facts.

• For goods involving movement, the place of supply is generally where the movement terminates for delivery to the recipient.
• Section 11 covers imported and exported goods, while Sections 12 and 13 cover domestic and cross-border services.
• For a taxable intra-State supply, CGST and SGST or UTGST ordinarily apply; an inter-State supply ordinarily attracts IGST.
• The place of supply can differ from the supplier’s address and, for some services, from the recipient’s ordinary location.
• Incorrect classification can result in tax being paid under the wrong head and may require correction under the applicable GST provisions.

Businesses should determine the applicable place-of-supply rule before issuing invoices and reporting supplies. Keep contracts, invoices, delivery records, and other supporting documents that establish the transaction facts.

Section 10 of the IGST Act, 2017 sets out the principal rules for goods supplied within India. The applicable rule depends on whether the goods move, remain at the same location, are assembled or installed, or are supplied on board a conveyance.

Example

A supplier in Maharashtra sends machinery to a registered recipient in Karnataka. Where the supply involves movement of goods to the recipient, the place of supply is Karnataka because the movement terminates there for delivery.

Section 12 applies where the supplier and recipient of services are both in India. Section 13 applies where either the supplier or recipient is outside India. Both sections contain general rules and specific rules for particular categories of services.

For cross-border services, Section 13(2) provides the default rule: the place of supply is the recipient’s location where available in the ordinary course of business, and otherwise the supplier’s location. Specific categories can override this default rule. The 2026 omission of Section 13(8)(b) is particularly relevant to intermediary services.

These examples do not replace the full statutory provisions. Services such as telecommunications, banking and financial services, insurance, events, and services supplied on board a conveyance have additional rules.

• Services directly related to immovable property are linked to the location of the property.
• Restaurant, catering, personal grooming, fitness, beauty treatment, and certain healthcare services are linked to where the service is actually performed.
• Training and performance appraisal use different rules depending on whether the recipient is registered.
• Telecommunication services can use rules based on the location of installation or the recipient’s records, depending on the service.
• Insurance services and banking or other financial services have specific rules based on the recipient’s location or supplier records.
• Passenger and goods transportation services have separate rules for registered and unregistered recipients.

A bill-to-ship-to arrangement can fall under Section 10(1)(b) when a supplier delivers goods to a recipient or another person on the direction of a third person before or during movement of the goods. The third person is deemed to have received the goods, and the place of supply is the principal place of business of that third person.

Example

A supplier in Maharashtra sells goods to a buyer that directs the supplier to deliver them to another party in Karnataka. If Section 10(1)(b) applies, the place of supply is determined using the principal-place-of-business rule for the third person rather than simply using the consignee’s location.

The GST portal uses the place-of-supply State to determine whether a reported outward supply is intra-State or inter-State. Section 8 of the IGST Act contains the intra-State rules and statutory exceptions, while Section 7 contains the inter-State rules.

An incorrect place-of-supply classification can result in tax being paid under the wrong head. For example, a transaction that should attract IGST may be reported as an intra-State supply with CGST and SGST, or the reverse.

• Identify the correct place-of-supply rule under the IGST Act.
• Correct the tax liability through the applicable GST procedure.
• Amend the relevant return where the GST framework permits correction.
• Apply for a refund of tax wrongly paid, where the statutory conditions and time limits are met.
• Retain documents supporting the correction and the transaction classification.

• Tax invoices and related debit or credit notes.
• Customer GSTIN and registered-address details, where applicable.
• Delivery challans, e-way bill information and transport records for goods.
• Contracts, work orders and service-location records for services.
• Documents supporting import or export transactions.
• Records showing the facts used to determine the place of supply.

GST law does not prescribe a separate fee for determining the place of supply. A business may incur internal or external compliance costs for accounting software, tax professionals, GST return preparation, invoice controls or transaction reviews. These costs depend on the business and service provider and should not be presented as a statutory GST charge.

• Identify whether the supply is goods or services.
• Identify the supplier’s location and the recipient’s status and location.
• Select the applicable IGST Act provision: Section 10, 11, 12, or 13.
• Check whether a specific rule or statutory exception applies.
• Determine whether the supply is intra-State or inter-State.
• Apply the appropriate GST component and record the supporting facts.

Businesses managing GST compliance may also need funding for working capital, inventory, equipment, technology, or other operational expenses. A Bajaj Finance Business Loan can provide eligible businesses with funding from Rs. 2 lakh to Rs. 80 lakh, with repayment tenures of 12 to 96 months. 

Applicants need KYC documents such as Aadhaar, passport, voter’s ID or driving licence, a PAN card, and proof of business ownership. Additional financial or business documents may be required based on the application details.

1. Start the application: Visit the Business Loan page and select ‘Check Loan Offer’. Enter your mobile number and verify it using the OTP.

2. Provide details: Enter your name, PAN, date of birth, PIN code, business information and the requested banking details.

3. Choose the loan requirement: Enter the required amount and select Term Loan, Flexi Dropline Loan or Flexi Hybrid Term Loan.

4. Select the repayment tenure: Choose a tenure from 12 months to 96 months based on the applicable offer and repayment capacity.

5. Review and submit: Check the details, complete KYC and submit the application for verification and credit assessment.