GST Place of Supply — Rules, Sections & CGST vs IGST Explained

Updated: 3 June 2026 | IGST Act, 2017 — Sections 10, 11, 12 & 13 | CGST Act, 2017

Place of Supply (POS) under GST determines whether a transaction is intra-state (CGST + SGST) or inter-state (IGST). It is governed by the IGST Act, 2017: Section 10 for goods, Section 12 for services where the supplier and recipient are both in India, and Section 13 for cross-border services. Getting POS wrong means charging the wrong tax — creating demand, interest, and ITC mismatch for both parties.

POS ≠ Billing Address

Place of Supply is a legal determination, not just the address on an invoice.
The IGST Act specifies the exact POS rule for each type of goods or service — billing address is only one of many factors.

Place of Supply for Goods — Section 10, IGST Act

For domestic supply of goods, the Place of Supply is primarily the location where the goods are delivered. The key rules under Section 10 are:

Scenario	Place of Supply	Tax Applicable
Goods delivered at buyer's location	Location where goods are delivered (delivery address)	If supplier state ≠ delivery state → IGST
Goods collected from supplier's premises	Supplier's location (principal place of business)	If both in same state → CGST + SGST
Goods assembled / installed at site	Location where assembly or installation is done	Depends on site location vs supplier state
Goods supplied on-board a conveyance (train/bus/aircraft)	Location where goods are taken on board	State of boarding point
Import of goods	Location of the importer (India)	IGST (customs duty + IGST at port)
Export of goods	Outside India	Zero-rated; IGST paid & refunded, or LUT/bond

Place of Supply for Services — Section 12, IGST Act (Both Parties in India)

For services where both supplier and recipient have a business establishment in India, Section 12 applies. The default rule is: POS = location of the recipient (their registered GSTIN address). Specific overrides apply for the service categories below:

Service Type	Place of Supply	Applicable Tax
General / Default (B2B)	Location of the recipient (GSTIN state)	Inter-state if supplier and recipient in diff. states → IGST
Immovable property services (construction, architect, valuation, real estate agent)	Location of the immovable property	IGST if property state ≠ supplier state
Performance-based services (training, events, repair, maintenance done at premises)	Location where service is actually performed	Depends on performance location
Banking & financial services (B2B)	Location of recipient (GSTIN address); if unavailable → supplier's location	Usually IGST for cross-state banking
Insurance services (B2B)	Location of recipient	IGST if cross-state
Telecommunications	Location where equipment is installed or SIM is registered	State of installation / SIM registration
Transportation of goods (B2B, GST registered)	Location of recipient (person contracting transporter)	IGST if cross-state
Passenger transportation	Location where journey originates (departure point)	State of departure

Place of Supply for Cross-Border Services — Section 13, IGST Act

When the supplier or the recipient is located outside India (import/export of services), Section 13 governs. The default rule under Section 13 is: POS = location of the recipient. If the recipient's location is not determinable, POS = location of the supplier.

IMPORT OF SERVICES

Indian Business Paying Foreign Service Provider

An Indian company paying a US SaaS vendor: POS = India (location of recipient). Tax = IGST under Reverse Charge Mechanism (RCM). The Indian recipient pays IGST to the government and claims it back as ITC (subject to eligibility).

EXPORT OF SERVICES

Indian Business Billing Foreign Client

POS = outside India (location of recipient). Qualifies as export of services if: (a) supplier in India, (b) recipient outside India, (c) place of supply outside India, (d) payment received in foreign exchange, (e) supplier and recipient are not merely establishments of the same company. Export of services is zero-rated — IGST paid is refunded, or services can be rendered under LUT without payment of IGST.

Practical Example: IT Company in Bangalore Billing Client in Delhi

This is the most common POS confusion for IT and consulting firms:

Parameter	Value
Supplier	IT company registered in Karnataka (Bangalore)
Recipient	Manufacturing company registered in Delhi
Service	Software development / IT consulting
Applicable POS rule	Section 12 default — POS = location of recipient = Delhi
Supplier state vs POS state	Karnataka ≠ Delhi → Inter-state transaction
Correct tax to charge	IGST (not CGST + SGST)
Common mistake	Charging Karnataka CGST + SGST on the invoice → creates ITC mismatch for Delhi buyer, wrong tax deposit to wrong state treasury

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Wrong POS = wrong tax type charged. The state that receives the wrong tax has no obligation to transfer it. The state where tax should have gone will raise a demand. Both supplier and recipient face ITC reversal and interest at 18% p.a. until corrected.

B2B vs B2C: How POS Determination Differs

Factor	B2B (GSTIN Available)	B2C (No GSTIN / Consumer)
Primary POS reference	Recipient's GSTIN state (Section 12 default)	Delivery address / location of consumption
Who bears the tax	Recipient claims ITC; net tax = value-add	Consumer bears full GST — no ITC
POS for digital services	Recipient's registered state (GSTIN state)	Consumer's location (IP / billing address / mobile)
Invoice requirement	Tax invoice with recipient GSTIN mandatory	Bill of supply or retail invoice; GSTIN optional
GSTR-1 reporting	B2B table (Table 4A/4B)	B2C summary or B2CL table depending on value

Frequently Asked Questions

What is the Place of Supply for online services (SaaS/software) delivered over the internet?

For online services (classified under OIDAR — Online Information and Database Access or Retrieval services), the Place of Supply under Section 13(12) is the location of the recipient. For a B2B client in Delhi receiving a SaaS service from a Bangalore supplier, POS = Delhi → IGST applies. For B2C consumers, the POS is still the location of the consumer (determined by phone number, billing address, or IP address). Failure to determine POS correctly leads to wrong tax collection.

What is the Place of Supply for a training or coaching programme?

Training and coaching are performance-based services. Under Section 12(7) of the IGST Act, POS for event-based or performance-based services is the location where the event is actually held or the service is performed. If the training is conducted in Mumbai, POS = Maharashtra, regardless of where the client is registered. For online-only courses, however, POS reverts to the recipient's location under the general default rule.

What is the POS for real estate and construction services?

For services directly related to immovable property — including construction, renovation, architect services, interior design, and legal services related to property — the Place of Supply is the location of the immovable property under Section 12(3) of the IGST Act. If a Delhi-registered architect designs a property in Goa, POS = Goa. The supplier must charge IGST (Delhi to Goa = inter-state), but must ensure they hold valid GSTIN in the correct state or register if providing services repeatedly in that state.

What is the Place of Supply for courier and logistics services?

For transportation of goods (courier/logistics) where both the consignor and the GST-registered business are known, the POS is the location of the recipient of the service (the person contracting the transporter) under Section 12(8). However, for third-party logistics where the receiver is not the GST-registered party, POS defaults to the registered place of business of the supplier. In practice, most B2B logistics invoices use the recipient's GSTIN state as the POS.

Does a wrong Place of Supply create a penalty, and how do you correct it?

Yes. Charging CGST/SGST when IGST should have been charged (or vice versa) creates a tax demand from the wrong state's GST authority. The recipient cannot claim ITC on the wrong tax. Correction requires: (1) issuing a credit note to reverse the wrong tax, (2) issuing a fresh invoice with the correct tax, (3) filing amended GSTR-1 (for next month's Table 9A), and (4) adjusting GSTR-3B. Interest at 18% p.a. applies on delayed correction. In genuine cases without fraudulent intent, a waiver can be sought under Section 128A (FY 2017-20) or via an appeal.

GST Registration GST Return Filing GST Invoice Rules IGST Act Overview Export of Services GST Advance Ruling

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