Place of supply under GST decides the tax character of a transaction. Once you know the place of supply, you can test whether the supply is intra-State or inter-State under the Integrated Goods and Services Tax Act, 2017, and that directly affects whether the invoice carries CGST plus SGST/UTGST or IGST.
This is why place-of-supply analysis sits at the center of GST drafting, invoicing, ERP configuration, e-commerce flows, branch structuring, and dispute prevention. A wrong answer can change tax type, return reporting, refund position, and even the basic commercial pricing of a transaction.
Why it matters in practice
- It determines whether the supply is inter-State or intra-State under sections 7 and 8 of the IGST Act.
- It affects the tax shown on the invoice. CBIC's invoice guidance requires the place of supply along with the name of State for inter-State supplies, and also the address of delivery where it differs from the place of supply.
- It can change whether a business is making inter-State outward supplies, which matters commercially and operationally. For example, anyone evaluating the simplified levy should also understand the restrictions discussed in this CA Samaaj explanation of the GST Composition Scheme.
Start with the correct sequence
- Identify whether the supply is of goods or services.
- Check whether the transaction is domestic or whether the supplier or recipient is outside India.
- Apply the specific place-of-supply rule first. Do not jump to the general rule if the transaction falls under a listed exception.
- After fixing the place of supply, compare it with the supplier's location to decide whether the supply is inter-State or intra-State.
- Make sure the invoice and system data match the legal position, especially recipient address, delivery address, and branch registration details.
Core rules for goods
For goods other than imports and exports, section 10 of the IGST Act gives the main rules. The correct clause depends on how the goods move and who controls that movement.
| Situation | Core rule | Operational meaning |
|---|---|---|
| Supply involves movement of goods | Place of supply is where movement terminates for delivery to the recipient | Look at the end point of delivery, not only the dispatch point |
| Bill-to ship-to model | If goods are delivered on the direction of a third person, that third person is deemed to have received the goods; place of supply is that person's principal place of business | This rule is critical for drop shipment and directed delivery structures |
| No movement of goods | Place of supply is the location of the goods at the time of delivery | Useful in transfer of title cases where goods do not move |
| Assembly or installation at site | Place of supply is the place of installation or assembly | Common in machinery, interior fit-out, and project supplies |
| Goods supplied on board a conveyance | Place of supply is the location where goods are taken on board | Relevant for on-board retail in aircraft, trains, or vessels |
| Goods supplied to an unregistered person | Clause (ca) overrides certain older goods rules for this category | Invoice address data now matters directly |
Important change-sensitive rule for goods supplied to unregistered persons
GST Council Circular No. 209/03/2024-GST, dated June 26, 2024, records that clause (ca) was inserted in section 10(1) with effect from October 1, 2023. Under that clause, where goods are supplied to a person other than a registered person, the place of supply is the location as per the address of that person recorded in the invoice. If no such address is recorded, the place of supply is the supplier's location.
The same circular specifically clarifies a common e-commerce fact pattern: when the billing address and the delivery address on the invoice are different for an unregistered recipient, the place of supply is the delivery address recorded on the invoice. The circular also notes that recording the name of the State is deemed to be recording the address for this clause.
Imports and exports of goods
Section 11 creates separate rules for goods crossing the border. For imported goods, the place of supply is the location of the importer. For exported goods, the place of supply is the location outside India.
Core rules for services when supplier and recipient are both in India
Section 12 is the starting point for domestic services. Its structure is simple: there is a general rule, and then there are specific overrides.
General rule
- If the service is supplied to a registered person, the place of supply is the location of that person.
- If the service is supplied to an unregistered person, the place of supply is the recipient's location where the address on record exists; otherwise it is the supplier's location.
Major service-specific overrides
- Immovable-property-linked services: place of supply is where the property, boat, or vessel is located or intended to be located.
- Restaurant, catering, grooming, fitness, beauty treatment, health services: place of supply is where the services are actually performed.
- Training and performance appraisal: for registered recipients, recipient location; for others, the place where actually performed.
- Admission to events: where the event is actually held or the venue is located.
- Organisation of events and sponsorship-related services: registered recipient location, or for unregistered persons the place where the event is actually held.
- Passenger transport: for registered recipients, recipient location; for unregistered persons, place of embarkation for the continuous journey.
- Services on board a conveyance: first scheduled point of departure of that conveyance.
- Telecom and broadcasting categories: special address- and installation-based rules apply.
- Banking and financial services: recipient location as per supplier records; if unavailable, supplier location.
- Insurance: registered recipient location, or for others the recipient location as per supplier records.
- Government advertisement contracts covering identified States or Union territories: allocation is made across those States or Union territories.
One statutory update worth flagging
The CBIC Tax Information Portal presently shows that domestic transportation-of-goods section 12(8) was omitted with effect from October 1, 2023. That matters because many legacy summaries still reproduce the old clause. Where older notes and current statutory text differ, the current portal text should control.
When either the supplier or the recipient is outside India
Section 13 governs services where either side is outside India. The default rule is that the place of supply is the location of the recipient. That default is then displaced for specific categories.
Important section 13 exceptions
- Services performed on goods physically made available by the recipient: generally where actually performed, with a specific rule for remote services on goods.
- Services requiring the physical presence of an individual recipient: where actually performed.
- Immovable-property-related services: where the property is located or intended to be located.
- Admission to or organisation of events: where the event is actually held.
- Banking and financial services to account holders: location of the supplier.
- Short-term hiring of means of transport, excluding aircraft and vessels: location of the supplier.
- Passenger transportation: place where the passenger embarks for the continuous journey.
- On-board passenger transport services: first scheduled point of departure.
- OIDAR services: location of the recipient, supported by the statutory deeming tests in section 13(12).
Another change-sensitive point appears on the current CBIC Tax Information Portal: section 13(8)(b) is shown as omitted by the Finance Act, 2026. Older commentary on intermediary services may therefore describe a rule that no longer appears in the current statutory text. Any professional analysis of intermediary fact patterns should be based on the current portal version of section 13, not an older secondary summary.
Worked examples with assumptions
Example 1: Machinery installed at site
Assumptions: A supplier registered in Maharashtra sells and installs a machine at the customer's factory in Gujarat. The contract covers supply plus site installation. The machine is assembled at the Gujarat site.
Result: Under section 10, where goods are assembled or installed at site, the place of supply is the place of installation. On these assumptions, the place of supply is Gujarat. The supplier is in Maharashtra, so the transaction is inter-State.
Example 2: Bill-to ship-to chain
Assumptions: Dealer A in Karnataka orders goods from Manufacturer B in Tamil Nadu and instructs B to ship the goods directly to Customer C in Kerala. Dealer A is the contracting buyer from B.
Result: For B's supply to A, the bill-to ship-to deeming rule applies. A is deemed to have received the goods, and the place of supply is A's principal place of business in Karnataka. Since B is in Tamil Nadu and the place of supply is Karnataka, B's supply to A is inter-State. A's onward supply to C must then be analysed separately on its own facts.
Example 3: E-commerce supply to an unregistered customer
Assumptions: A seller registered in Delhi supplies a laptop through an e-commerce platform to an unregistered individual. The invoice shows a billing address in Delhi and a delivery address in Haryana.
Result: Based on Circular No. 209/03/2024-GST, the place of supply follows the delivery address recorded on the invoice in this fact pattern. On these assumptions, the place of supply is Haryana, so the supply is inter-State.
Example 4: Hotel accommodation booked by a registered company
Assumptions: A company registered in Karnataka books accommodation for employees at a hotel in Rajasthan.
Result: Hotel accommodation falls under the immovable-property-linked rule in section 12(3), not the general registered-recipient rule in section 12(2). The place of supply is Rajasthan because that is where the property is located.
Example 5: Domestic management consultancy
Assumptions: A consultancy firm registered in Maharashtra provides online advisory services to a GST-registered client in Telangana. No specific section 12 override applies.
Result: The general rule applies. The place of supply is the registered recipient's location, Telangana. The supplier is in Maharashtra, so the supply is inter-State.
Common error patterns
- Treating every B2B service as recipient-location based without checking specific overrides.
- Using dispatch location instead of delivery termination for goods involving movement.
- Ignoring the bill-to ship-to deeming fiction.
- Using billing address reflexively for unregistered goods supplies after the 2024 clarification, even where the invoice records a different delivery address.
- Relying on old summaries of section 12(8) or section 13(8)(b) without checking the current statutory text.
- Allowing invoice data, ERP master data, and actual contractual facts to diverge.
Practical checklist
- Identify whether the supply is goods or services, and split mixed contracts carefully where the law requires.
- Map supplier location, recipient status, recipient location, delivery location, and performance location separately.
- Check for a specific statutory override before using the general rule.
- For goods to unregistered persons, ensure the invoice captures the address data you actually want the legal analysis to rest on.
- For immovable property, events, telecom, banking, insurance, and cross-border services, verify the exact subsection before invoicing.
- Review older SOPs, tax engines, and marketplace configurations for post-October 1, 2023 changes.
Place of supply under GST is not a drafting formality. It is the rule that connects facts on the ground to the tax type on the invoice. In professional work, the disciplined approach is to identify the exact statutory bucket first, then let invoicing and return reporting follow that legal answer.
