The Place of Supply Decision Tree

Place of Supply Decision explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.

Every place-of-supply question resolves through the same six steps, taken in order. Taking them out of order is what produces most wrong answers.

1. Goods or services? 2. Cross-border, or both parties in India? 3. For goods: import, export, or domestic? 4. For services: does a specific sub-section apply? 5. Apply the rule, checking the registration status where the rule splits on it. 6. Compare the answer with the supplier's location to determine IGST or CGST+SGST.

Step 1: goods or services?

Goods → s.10 (domestic) or s.11 (import and export). Services → s.12 (both parties in India) or s.13 (one party outside India).

Where the answer is not obvious, resolve it first, because the entire route depends on it:

• a composite supply takes the character of its principal supply — s.2(30) and s.8(a) of the CGST Act; Identifying the principal supply →
• a works contract is a service under Schedule II paragraph 6(a), so it goes to s.12(3) or s.13(4), not to s.10(1)(d);
• goods installed at site as goods go to s.10(1)(d);
• a mixed supply takes the treatment of the item attracting the highest rate under s.8(b).

Step 2: is either party outside India?

Both in India → s.12 for services, s.10 for goods. Either outside India → s.13 for services, s.11 for goods where they cross the border.

And "location" is a defined term, not an address:

• location of the supplier of services — s.2(15) of the IGST Act;
• location of the recipient of services — s.2(14);
• fixed establishment — s.2(7) of the IGST Act and s.2(50) of the CGST Act: sufficient degree of permanence and a suitable structure in terms of human and technical resources.

A foreign company with an Indian branch, project office or liaison office may have an establishment in India under Explanation 2 to s.8, which changes the answer to this question. Establishments of distinct persons →

Step 3: for goods

Take them in that order. Clause (b) is not displaced by clause (ca); clauses (d) and (e) are specific; clauses (a) and (c) are the residual pair. Section 10(1)(a) →

Step 4: for services, find the specific rule first

Section 12 — both parties in India. Check sub-sections (3) to (14) before applying 12(2):

Section 13 — one party outside India. Check sub-sections (3) to (13) before applying 13(2):

Two are gone: 13(8)(b) intermediary — omitted w.e.f. 30.03.2026; 13(9) goods transport — omitted w.e.f. 01.10.2023. Both now fall to 13(2). Section 13(2) →

Step 5: apply the rule, checking three things

Registration status, where the rule splits on it — 12(2), 12(5), 12(7), 12(8), 12(9), 12(13), and 10(1)(ca) for goods. Several rules do not split: 12(4), 12(6), 12(10), 12(11), 12(12), and the whole of s.13.

Multi-location and multi-State, where an apportionment applies — 12(3), 12(7), 12(11), 12(14) and 13(7), each keyed to the contract; and 13(6), which resolves multi-location performance in favour of India.

Whether a default applies — several rules fall back to the supplier's location where the recipient's address is unavailable: 12(2)(b)(ii), 12(11) first proviso, 12(12) proviso, and 13(2) proviso.

Step 6: compare, and determine the head

Compare the place of supply with the location of the supplier.

Different States or Union territories → inter-State under s.7 → IGST. Same State or Union territory → intra-State under s.8 → CGST + SGST.

And check the deemings that override the comparison:

• imports of goods and services — deemed inter-State;
• supply to or by an SEZ developer or unit — deemed inter-State, whatever the geography;
• supplies in territorial waters — attributed to the nearest coastal State under s.9.

Then the zero-rating question, separately:

• export — the five conditions in s.2(6) for services, or goods leaving India;
• SEZ — zero-rated only for authorised operations under s.16(1)(b). SEZ authorised operations →

The four errors this sequence prevents

Applying the default before checking the specific rules. Section 12(2) and s.13(2) are residual; twelve and eleven sub-sections respectively take priority.

Using the billing address by default. It matters for 10(1)(ca) and 12(11)(b), and nowhere else as a general rule.

Assuming a foreign recipient means an export. Place of supply outside India is one of five conditions in s.2(6).

Treating an SEZ supply by geography. It is always inter-State, and zero-rated only for authorised operations.

Key takeaways

• Six steps, in order: goods or services; cross-border or domestic; the goods rules; the specific services rule; apply it; compare with the supplier's location.
• Specific rules always precede the default — twelve in s.12, eleven in s.13.
• Registration status splits some rules and not others — check which.
• Apportionment rules are all keyed to the contract, so drafting fixes the outcome.
• Deemings override the comparison — imports and SEZ supplies are inter-State regardless.
• Zero-rating is a separate question from the head of tax.

Read next

• Sections 7 and 8: The Two-Step Inter-State Test
• Section 12(2): The Default Rule for Services Within India
• Section 13(2): The Default Cross-Border Rule
• Export of Services: The Five Conditions in Section 2(6)

Disclaimer: Positions stated as on 5 September 2026, based on the IGST Act and the CGST Act as amended to 31 March 2026 (ICAI Bare Law, 12th edition).