Quick Answer
Place of Supply (POS) decides 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 both parties are in India, and Section 13 for cross-border services. If the supplier's state and the POS state are the same, charge CGST+SGST; if different, charge IGST. Getting POS wrong means charging the wrong tax — creating demand, 18% interest and an ITC mismatch for both parties.
Goods — Sec 10 Delivery
Services — Sec 12 Recipient
Same state CGST+SGST
Diff. state IGST
POS is a legal test, not just the billing address
The IGST Act specifies an exact POS rule for each category of goods or service. Billing address is only one factor — for immovable property it is the property location, for performance-based services the place of performance, and for on-board goods the boarding point. Match the rule to the supply type, not the invoice header.
Section 10 · IGST Act
Place of Supply for Goods
For a domestic supply of goods, the Place of Supply is generally the location where the movement of goods terminates for delivery to the recipient. The key scenarios:
| Scenario | Place of Supply | Tax |
|---|---|---|
| Goods delivered to buyer (with movement) | Where delivery to the recipient ends | Supplier state ≠ delivery state → IGST |
| Buyer collects from supplier (no movement) | Location of the goods at delivery | Same state → CGST+SGST |
| Goods assembled / installed at site | Place of installation or assembly | Depends on site vs supplier state |
| Goods supplied on board (train / bus / aircraft) | Where goods are taken on board | State of the boarding point |
| Bill-to / ship-to (third-party delivery) | Principal place of business of the person who directs the supply | Deemed receipt by that person |
| Import of goods | Location of the importer in India | IGST at the customs port |
| Export of goods | Outside India | Zero-rated — IGST refund or LUT/bond |
IGST Act 2017, Section 10 (domestic) and Section 11 (import/export of goods). GST 2.0 (22 Sep 2025) rationalised rates but did not change the place-of-supply rules.
Section 12 · IGST Act
Place of Supply for Services (Both Parties in India)
When both the supplier and recipient are in India, Section 12 applies. The default rule is: for a registered recipient, POS = location of the recipient (their GSTIN state); for an unregistered recipient, POS = the address on record, else the supplier's location. Specific overrides apply below.
| Service Type | Place of Supply | Typical Tax |
|---|---|---|
| General / default (B2B) | Location of the recipient (GSTIN state) | IGST if states differ |
| Immovable property (construction, architect, valuation, agent, hotel) | Location of the immovable property | Depends on property state |
| Performance-based (training, events, repair on premises) | Where the service is actually performed | Depends on performance state |
| Restaurant / catering, personal grooming, fitness | Where the service is performed | State of performance |
| Transportation of goods (registered recipient) | Location of the recipient | IGST if cross-state |
| Passenger transport | Where the passenger embarks / journey begins | State of departure |
| Telecom, DTH, broadband | Where the equipment is installed / SIM registered | State of installation |
| Banking, financial & insurance (registered recipient) | Location of the recipient | IGST if cross-state |
IGST Act 2017, Section 12. For B2C where GSTIN is not available, the address on record or place of performance decides POS.
B2B
Registered recipient (GSTIN available)
- POS = recipient's GSTIN state under the default rule
- Tax invoice with recipient GSTIN mandatory
- Recipient can claim Input Tax Credit
- Reported in the B2B tables of GSTR-1
vs
B2C
Unregistered / consumer
- POS = address on record, else place of supply
- Consumer bears full GST — no ITC
- Bill of supply / retail invoice
- Reported in B2C summary or B2CL tables
Not sure whether to charge IGST or CGST+SGST on your invoices?
Talk to a GST Expert →Section 13 · IGST Act
Cross-Border Services — Import & Export
When either the supplier or the recipient is outside India, Section 13 applies. The default rule is POS = location of the recipient; if that is not available, POS = location of the supplier.
- Import of services — an Indian business paying a foreign vendor (e.g. a US SaaS): POS = India, tax = IGST under Reverse Charge (RCM); the recipient pays and claims it as ITC if eligible.
- Export of services — an Indian supplier billing a foreign client: POS = outside India; zero-rated if all five export conditions are met (supplier in India, recipient outside India, POS outside India, payment in convertible foreign exchange, and the two are not mere establishments of one entity).
- OIDAR / online services follow the recipient's location; for B2C consumers, IP address, billing address or mobile country code determine POS.
Worked example
Bangalore IT Firm Billing a Delhi Client
SupplierIT firm registered in Karnataka
→
RecipientClient registered in Delhi
→
POS ruleSec 12 default = recipient = Delhi
→
Correct taxKarnataka ≠ Delhi → IGST
Because the supplier state (Karnataka) differs from the POS state (Delhi), this is an inter-state supply and IGST must be charged — not Karnataka CGST+SGST. Charging the wrong heads breaks the Delhi buyer's ITC and deposits tax to the wrong treasury.
Wrong POS = wrong tax head charged
If you charge CGST+SGST when IGST was due (or vice versa), the state that received the wrong tax has no duty to transfer it, and the correct state can raise a demand. Both parties face ITC reversal and interest at 18% p.a. (Section 50) until corrected — usually via a credit note, a fresh correct invoice, and amendment in the next GSTR-1 and GSTR-3B.
- Identify goods vs service supply
- Apply the correct POS section (10 / 12 / 13)
- Compare supplier state with POS state
- Pick CGST+SGST (same) or IGST (different)
- Capture recipient GSTIN for B2B
- Report under the right GSTR-1 table
Government sourcesPlace of supply — goods: gst.gov.in, IGST Act §10-11 · Place of supply — services: IGST Act §12 (domestic) & §13 (cross-border) · CBIC: cbic-gst.gov.in · Interest on short/wrong payment: Section 50, CGST Act 2017
People also ask
Frequently Asked Questions
Basics
What is Place of Supply under GST?
Place of Supply (POS) is the location deemed by law to be where a supply is made. It determines whether a transaction is intra-state (CGST+SGST) or inter-state (IGST). POS is fixed by the IGST Act, 2017 — Section 10 for goods, Section 12 for services within India, and Section 13 for cross-border services. It is a legal test based on the type of supply, not simply the billing address on the invoice.
How does Place of Supply decide CGST+SGST vs IGST?
Compare the supplier's state (location of supply) with the Place of Supply. If they are the same state, the supply is intra-state and CGST+SGST applies. If they are different states (or union territories), it is inter-state and IGST applies. The rates are the same either way; only the tax heads change, which is why getting POS right matters for the recipient's Input Tax Credit.
Which section governs Place of Supply in GST?
The IGST Act, 2017 governs POS. Section 10 covers place of supply of goods within India, Section 11 covers import and export of goods, Section 12 covers services where both supplier and recipient are in India, and Section 13 covers services where either party is outside India. The GST 2.0 rate rationalisation of 22 September 2025 did not amend these place-of-supply provisions.
Goods
What is the Place of Supply for goods?
For goods that move, POS is generally where the movement terminates for delivery to the recipient (the delivery location). Where there is no movement, POS is the location of the goods at the time of delivery. Special rules apply for assembly/installation (site location), goods supplied on board a conveyance (boarding point) and bill-to/ship-to transactions (the person who directs the supply).
What is the Place of Supply in a bill-to / ship-to transaction?
In a bill-to/ship-to (third-party delivery) transaction, the goods are deemed to be received by the person who directs the supplier to deliver to a third party. That person's principal place of business is taken as the Place of Supply for the first leg, even though the goods physically ship elsewhere. This ensures ITC flows correctly to the bill-to party.
What is the Place of Supply for imported and exported goods?
For import of goods, POS is the location of the importer in India, and IGST is levied at the customs port along with basic customs duty. For export of goods, POS is outside India and the supply is zero-rated — the exporter can either pay IGST and claim a refund or export under a Letter of Undertaking (LUT) without paying IGST.
Services
What is the Place of Supply for services?
Under Section 12, the default POS for services within India is the location of the registered recipient (their GSTIN state). If the recipient is unregistered, POS is the address on record, and where none exists, the supplier's location. Specific services — immovable property, performance-based, transport, telecom, banking — have their own overrides that displace the default rule.
What is the Place of Supply for IT and software (SaaS) services?
For B2B IT and SaaS services within India, POS is the location of the recipient. A Bangalore supplier billing a Delhi client charges IGST because Karnataka differs from Delhi. For B2C consumers, POS is the consumer's location, identified through phone number, billing address or IP. For a foreign SaaS vendor billing an Indian business, POS is India and IGST applies under Reverse Charge.
What is the Place of Supply for real estate and construction services?
For services directly related to immovable property — construction, renovation, architect, interior design, surveying, hotel accommodation and property-related legal work — POS is the location of the property (Section 12(3)). If a Delhi architect designs a building in Goa, POS is Goa, so IGST is charged; the supplier must ensure the correct GSTIN/registration position for that state.
What is the Place of Supply for training and events?
Training, coaching and events are performance-based. Under Section 12(7)/12(5), POS is where the event is held or the service is performed. Training conducted in Mumbai has POS in Maharashtra regardless of where the client is registered. For online-only courses with no physical event, POS reverts to the recipient's location under the default rule.
What is the Place of Supply for courier, transport and logistics?
For transportation of goods to a registered recipient, POS is the location of that recipient (the person contracting the transporter) under Section 12(8). Where the recipient is unregistered, POS is where the goods are handed over for transport. For passenger transport, POS is where the passenger embarks on the continuous journey.
Cross-border
What is the Place of Supply for import of services?
For import of services, POS is the location of the recipient in India under Section 13. The Indian recipient pays IGST under the Reverse Charge Mechanism (RCM) and can claim it back as Input Tax Credit if the service is used for business and is not otherwise blocked. Common examples are foreign software subscriptions, cloud hosting and overseas consultancy.
When does a service qualify as export of services?
A service is an export only if all five conditions are met: the supplier is in India, the recipient is outside India, the Place of Supply is outside India, payment is received in convertible foreign exchange (or INR where RBI permits), and the supplier and recipient are not merely establishments of the same entity. Export of services is zero-rated — either IGST paid and refunded, or supplied under LUT.
Errors & Correction
What happens if I charge CGST+SGST instead of IGST?
Charging the wrong tax head means the correct state's treasury does not receive its due tax and can raise a demand, while the recipient cannot claim ITC on the wrongly charged tax. You correct it by issuing a credit note to reverse the wrong tax, raising a fresh invoice with the right heads, and amending the next GSTR-1 (Table 9A) and GSTR-3B. Interest at 18% p.a. can apply on delayed correction.
Can the recipient claim ITC if the wrong tax type was charged?
No. Input Tax Credit follows the correct tax head. If IGST was due but CGST+SGST was charged (or vice versa), the recipient cannot validly claim credit on the wrongly charged tax, and any credit taken is liable to reversal with interest. The supplier must reissue the invoice with the correct heads so the recipient's GSTR-2B reflects the right credit.
Does Place of Supply change under GST 2.0?
No. The GST 2.0 rationalisation effective 22 September 2025 restructured tax rates into a two-slab system (5% and 18%, with a 40% demerit rate) but did not amend the place-of-supply provisions of the IGST Act. Sections 10, 11, 12 and 13 continue to decide intra-state versus inter-state supply exactly as before.
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