Place of Supply under GST: Rules for Goods, Services, IGST and CGST

Place of Supply under GST determines where a supply is treated as taking place. This decision is important because it helps a business choose between IGST and CGST with SGST or UTGST.

A wrong place-of-supply decision can result in the wrong tax being charged on an invoice, incorrect return reporting and difficulties for the customer while claiming input tax credit. The rules are different for goods, services and cross-border transactions.

What does place of supply mean?

Place of supply is the location assigned to a transaction under the IGST Act. It is not always the same as the supplier’s business address or the place from which the invoice is issued.

The supplier must consider the nature of the supply, the customer’s location, the movement of goods, the location of the property or event and other facts prescribed under the law.

Why is place of supply important?

Place of supply helps determine whether a transaction is intra-State or inter-State:

Intra-State supply generally attracts CGST and SGST or UTGST.
Inter-State supply generally attracts IGST.
Exports and certain supplies to or from outside India follow special rules.

The place of supply should be recorded correctly on the tax invoice. For general invoice requirements, read our GST invoice format guide.

Place of supply for goods

For goods involving movement, the place of supply is generally the location where the movement of goods ends for delivery to the recipient.

For example, if a supplier in Maharashtra sends goods to a registered buyer in Karnataka and delivery ends in Karnataka, the transaction will generally be treated as an inter-State supply and IGST may apply.

When goods are supplied without movement, the place of supply is generally the location of the goods at the time of delivery to the recipient.

For goods assembled or installed at a site, the place of supply is generally the location where the installation or assembly takes place.

For goods supplied on board a vessel, aircraft, train or motor vehicle, the place of supply is generally the location where the goods are taken on board.

Bill-to and ship-to transactions

In a bill-to and ship-to arrangement, the supplier may be instructed to deliver goods to another person or location nominated by the buyer. The place of supply follows the special rule applicable to the principal transaction and is not decided only by the final delivery address.

Businesses should keep the purchase order, delivery instructions and invoice records together so the tax treatment can be explained if required.

Place of supply for services within India

For services supplied to a registered person, the place of supply is generally the location of that registered recipient.

For services supplied to an unregistered person, the general rule is usually the location of the recipient when that address is available in the supplier’s records. If the recipient’s address is not available, the supplier’s location may be used under the applicable rule.

These general rules do not apply to every service. The IGST Act provides special rules for services connected with immovable property, events, transportation, banking, insurance and telecommunications.

Special rules for services

Services connected with immovable property

Services such as construction, architect services, interior decoration, property management and hotel accommodation are generally connected with the location of the immovable property or the place where the property is located.

Restaurant and personal services

Restaurant and catering services, personal grooming, fitness, beauty treatment and health services generally follow the location where the service is actually performed.

Training and performance appraisal

For services supplied to a registered person, the recipient’s location generally applies. For services supplied to an unregistered person, the place where the service is actually performed may become relevant under the special rule.

Events and admission

Admission to cultural, artistic, sporting, educational or entertainment events generally follows the location where the event is held. Organisation of an event may be governed by a separate rule depending on whether the recipient is registered or unregistered.

Transportation of goods

Transportation services follow specific rules. For a registered recipient, the recipient’s location generally applies. For an unregistered recipient, the place where the goods are handed over for transportation may become relevant.

Place of supply for services received from outside India

For cross-border services, the default rule generally considers the location of the recipient. If the recipient’s location is not available in the ordinary course of business, the supplier’s location may be considered under the applicable provision.

Special rules apply to services connected with property, events, transportation, online databases and other categories. Importers of services should also review whether reverse charge applies.

Read our Reverse Charge Mechanism under GST guide for more information about recipient tax liability.

How to decide between IGST and CGST with SGST

Identify whether the supply relates to goods or services.
Find the supplier’s location and the recipient’s location.
Check whether the transaction involves movement, installation, property or an event.
Apply the general or special place-of-supply rule.
Compare the place of supply with the supplier’s location.
Charge IGST for an inter-State supply or CGST with SGST or UTGST for an intra-State supply.
Record the correct place of supply and State code on the invoice.

Practical examples

Transaction	Likely tax treatment
Delhi supplier sends goods to a buyer in Haryana	Generally inter-State; IGST may apply
Maharashtra supplier sells goods to a buyer in Maharashtra	Generally intra-State; CGST and SGST may apply
Delhi architect provides property-related services for land in Rajasthan	Place of supply generally follows the property location
Consulting service supplied to a registered recipient in Gujarat	Place of supply generally follows the recipient’s registered location

These examples are simplified. The actual result depends on the facts, recipient status, service category and applicable provisions.

Common mistakes

Using the supplier’s address for every transaction
Charging CGST and SGST when IGST should apply
Ignoring special rules for property or events
Using the billing address without checking the recipient’s actual registration
Failing to record the correct State code on the invoice
Applying the goods rule to a service transaction
Ignoring reverse-charge implications for imported services

Conclusion

Place of Supply under GST is essential for selecting the correct tax and preparing an accurate invoice. Always identify the type of supply, apply the relevant IGST Act rule and compare the place of supply with the supplier’s location before charging IGST or CGST with SGST.

For related compliance guidance, read our GST payment online guide and GST refund guide.