Section 9 of IGST 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.
Section 9 of the IGST Act, 2017 resolves how supplies made at sea are taxed. Where the supplier's location or the place of supply is in the territorial waters — up to twelve nautical miles from the Indian baseline — it is deemed to be in the coastal State or Union territory nearest the appropriate baseline point, giving offshore transactions a definite State.
What Section 9 Says — In Plain English
GST is charged by reference to States, but the sea belongs to no State. That creates a problem for supplies made on the water — services to a ship, offshore drilling support, goods delivered to a rig — because without a State you cannot tell whether to charge IGST or CGST plus SGST, or which State's SGST is due. Section 9 solves it with a deeming fiction. If a supplier's location or the place of supply falls in the territorial waters, the law pretends that location is in the nearest coastal State or Union territory, measured from the appropriate baseline point. Once a State is fixed, the ordinary machinery in Sections 7 and 8 can operate normally.
Clause / Sub-section Breakdown
- Supplier in territorial waters — the supplier's location is deemed to be in the coastal State/UT where the nearest point of the appropriate baseline is located.
- Place of supply in territorial waters — the place of supply is deemed to be in the coastal State/UT where the nearest point of the appropriate baseline is located.
- Extent of territorial waters — up to twelve nautical miles measured from the baseline.
- Alignment — mirrors Section 9 of the CGST Act, so both laws treat offshore supplies identically.
Applicability & Scope — Who & When
Section 9 applies to supplies connected with the sea within twelve nautical miles of the coast — services rendered to vessels, offshore drilling and rig support, port-related activities, or goods supplied to a ship lying in territorial waters. Without this rule there would be no identifiable State to attribute the supply to, making the inter-State versus intra-State call impossible. By anchoring the location to the nearest coastal State or UT, Section 9 lets the normal tests in Sections 7 and 8 decide the tax and the recipient State.
Worked Examples
Example 1 — Deemed intra-State. An offshore support company provides maintenance worth ₹5,00,000 to a rig positioned about 8 nautical miles off Gujarat, with the nearest baseline point in Gujarat. Under Section 9 the place of supply is deemed to be Gujarat. If the supplier is also located in Gujarat, the transaction is intra-State — CGST ₹45,000 + SGST ₹45,000 at 18%.
Example 2 — Deemed inter-State. Take the same rig off Gujarat, but the supplier is located in Maharashtra. The deemed Gujarat place of supply differs from the Maharashtra supplier location, so under Section 7 it is inter-State, attracting IGST of ₹90,000 at 18% on the ₹5,00,000 value. Either way, Section 9 supplies the missing State so the tax can be charged at all.
Step-by-Step / How It Works
- Check whether the supplier location or the place of supply is within twelve nautical miles of the coast.
- Identify the nearest point of the appropriate baseline and the coastal State/UT it belongs to.
- Deem that location or place of supply to be in that coastal State/UT.
- Apply Sections 7 and 8 to decide IGST versus CGST + SGST.
Common Mistakes & Practical Notes
- Treating an offshore supply as having no State and therefore no GST — the deeming rule always assigns one.
- Using the coast physically nearest by eye rather than the nearest appropriate baseline point.
- Forgetting that beyond twelve nautical miles (the continental shelf / EEZ) different rules and notifications may apply.
- Assuming an offshore supply is automatically inter-State — it can be intra-State once the State is fixed.
Related Sections (CGST cross-refs)
- Section 7 — Inter-State supply test applied after the deemed location is fixed.
- Section 8 — Intra-State supply where deemed supplier location and place of supply are the same State.
- Sections 10-12 — Place-of-supply rules that operate alongside the deeming fiction.
- Section 9 of the CGST Act — Parallel provision for supplies in territorial waters.
Recent Amendments & Context
Section 9 has not required amendment, but its scope is often discussed alongside the taxation of supplies in the exclusive economic zone and on the continental shelf for offshore oil and gas operations, which are governed by separate notifications extending GST beyond the twelve-nautical-mile belt. The section remains the settled rule for the near-shore territorial-waters zone itself.