Place of supply
Under GST, place of supply determines is what that determines whether a transaction is treated as intra-state or inter-state.
For goods, place of supply depends on where the delivery ends and for services, place is supply is where the services are consumed.
Rules for determining the place of supply of goods are defined in Section 10 of the IGST Act.
- where the supply involves movement of goods: Place of supply (POS) shall be the location where goods are delivered to the contractual recipient ie customer/buyer after movement.
- Delivery to the instructions of third person: If the supply involves supplier delivering goods to someone on the instruction of a third person (whether through physical delivery or by transferring ownership documents), then GST law treats that third person as the recipient, and the place of supply is the principal place of business of that third person.
- Where there are no movement of goods: POS shall be the location where goods are handed over to the contractual recipient.
- Where the goods are assembled or installed at site: POS shall be the place of such installation or assembly
- Goods board a conveyance: where the goods are supplied boarding a conveyance, POS shall be location at which the goods are taken on board . Meaning the goods are loaded onto the vessel.
Rules for determining the place of supply of services For Domestic transactions- Section 12 of the IGST Act.
Section 12 applies when supplier and recipient are located in India. There are two set of rules. One is General Rule that is applicable for determining provision of supply and another set of rules applicable for special cases. They are detailed below.
General Rule:- If the supply is to a registered person --> Place of supply = Location of the recipient.
- If the supply is to an unregistered person --> Place of supply = recipient’s address on records; if not available, the supplier’s location.
Special case Rules:
Beyond the general rule, Section 12 also lays down special cases (Sub-sections 3–14) that specify the place of supply for particular categories of services and those are tabulated below.
| Service/Recipient | Place of supply |
|---|---|
| Services involving Immovable property (architect, surveyor, engineer, real estate agent etc) |
Property location |
| In case of personalized services (like Restaurant, catering, personal grooming, fitness, health services etc) |
where service is performed |
| Services in relation to Training and performance appraisal | where service is performed |
| Entertainment Services in the nature of admission to events or entrance to location (sports, cultural, entertainment, amusement parks) |
where event is held or located |
| Where the service itself is organizing events | recipient’s location (if registered), otherwise where event is held |
| The Service is transportation of goods | recipient’s location (if registered), otherwise where goods are handed over |
| The Service is passenger transport service | where passenger boards for continuous journey |
| Where the services is rendered on board conveyance (train, bus, aircraft, ship) | first scheduled point of departure. |
| In case of Telecommunication services | as per specific rules applicable (fixed line = installation place, mobile/internet = billing address). |
| In case of Banking, financial, insurance services | recipient’s location |
| Advertisement services provided to Government | each State/UT where advertisement is displayed |
Rules for determining the place of supply of services For Cross Border transactions- Section 13 of the IGST Act.
Section 13 applies for cross border transactions. Applies when either supplier or recipient is outside India.
General Rule (Sec. 13(2)): Place of supply = location of the recipient. If not available, then supplier’s location.
Special Cases (Sec. 13(3)–13(13)):
- Services related to immovable property--> Place of supply = location of the property.
- Performance-based services --> Place of supply = where services are performed.
- Services supplied at events --> Place of supply = where the event is held.
- Banking, intermediary, short-term hiring of transport, online information/database access --> Specific rules apply.