🔹 Introduction

The place of supply determines whether a transaction is treated as interstate (IGST) or intrastate (CGST + SGST) under GST. Incorrect determination can lead to wrong tax payment, ineligible ITC, and notices. For businesses engaged in inter-state trade and services, understanding place of supply rules is crucial.

(Reference: Sec. 10–13 of IGST Act, CBIC clarifications till FY 2024-25)

🔹 Place of Supply – Goods

✅ 1. Domestic Transactions (Sec. 10)

• Movement of goods: Place = Location where goods terminate delivery.

• No movement of goods: Place = Location at which goods are delivered.

• Goods on board (ship/aircraft): Place = Location where goods taken on board.

• Supply to registered person: Place = Location of recipient.

• Supply to unregistered person: Place = Location of delivery.

✅ 2. Import & Export of Goods (Sec. 11)

• Imports: Place of supply = Location of importer.

• Exports: Place of supply = Location outside India (zero-rated supply).

🔹 Place of Supply – Services

✅ 1. General Rules (Sec. 12)

• B2B (Registered recipient): Place = Location of recipient.

• B2C (Unregistered recipient): Place = Location of supplier (default rule).

✅ 2. Specific Services

• Immovable Property Services: Place = Location of property (e.g., renting, construction, accommodation).

• Restaurant & Catering: Place = Location of performance of service.

• Transport of Goods (Domestic): Place = Location of recipient (B2B) / Place of delivery (B2C).

• Passenger Transport: Place = Location where passenger embarks.

• Training & Performance Events: Place = Location of performance (B2C) / Location of recipient (B2B).

• Online Information & Database Access (OIDAR): Place = Location of recipient.

✅ 3. International Services (Sec. 13)

• General rule = Place of recipient (if address available).

• Performance-based services (property, events, transport) → place of actual performance.

• OIDAR services supplied to unregistered recipient in India → Supplier liable to pay IGST under reverse charge.

🔹 Impact of Place of Supply on Tax

• Correct determination → Proper tax flow (IGST vs CGST/SGST).

• Wrong determination → Dual taxation or ITC blockage. Example: Tax charged as CGST/SGST instead of IGST → Recipient in another state cannot claim ITC.

🔹 Practical Examples

Example 1: Trader in Delhi sells to registered buyer in Mumbai
Place of supply = Mumbai (recipient location). Tax = IGST.

Example 2: Hotel service in Noida provided to Mumbai customer
Place of supply = Noida (property location). Tax = CGST + SGST.

Example 3: Export of IT services to USA
Place of supply = USA. Zero-rated supply under GST.

Example 4: Transport of goods by road from Ghaziabad to Jaipur
Place of supply = Jaipur (delivery place). IGST payable.

Example 5: OIDAR services from foreign company to Indian consumer
Place of supply = India. Supplier/representative liable for IGST.

🔹 Common Mistakes

• Treating B2C services as B2B.

• Wrongly charging CGST+SGST instead of IGST.

• Ignoring OIDAR rules for international digital services.

• Not considering special provisions for immovable property.

🔹 Best Practices

• ✅ Maintain SOPs for identifying recipient status (B2B/B2C).

• ✅ Reconcile GST returns with sales data to check tax head (IGST vs CGST/SGST).

• ✅ Cross-check service classification with place of supply rules.

• ✅ Take professional help for cross-border contracts.

🔹 FAQs

Q1. What if wrong tax (CGST+SGST instead of IGST) is charged?
➡️ Supplier must pay correct tax and adjust/refund wrongly collected tax.

Q2. Is export always zero-rated?
➡️ Yes, but subject to LUT/Bond or IGST refund mechanism.

Q3. For online courses sold to Indian consumers, place of supply?
➡️ India, as per OIDAR rules.

Q4. For renting property in another state, which tax applies?
➡️ Place of property location, hence CGST+SGST of that state.

Q5. For domestic air tickets, place of supply?
➡️ Place where passenger embarks.

🔹 Conclusion

Place of supply is the foundation of GST applicability. Correct determination ensures smooth ITC flow, avoids double taxation, and compliance disputes. Businesses dealing with inter-state and international transactions must carefully apply rules.

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