Place of supply under GST: the full decision tree
One wrong call creates two demands and one refund you cannot claim. This is the provision with the least margin for error in the entire Act.
Place of supply for goods is determined by Sections 10 and 11 of the IGST Act, principally by the location at which the movement of goods terminates for delivery, with special rules for bill to ship to transactions, supplies without movement, goods assembled at site, goods on board a conveyance, and imports and exports. For services, Section 12 applies where both supplier and recipient are in India and Section 13 where either is outside India, with a default rule of the recipient's location and a series of specific rules for immovable property, performance based services, events, transportation, banking, intermediary services and others.
Goods: Sections 10 and 11
Where the supply involves movement of goods, the place of supply is the location where the goods are delivered to the recipient.
Where goods are delivered to a recipient on the direction of a third person, Section 10(1)(b) deems the place of supply to be the principal place of business of that third person. This is the bill to ship to rule and it is the single most misapplied provision in the Act.
Where there is no movement, the place of supply is the location of the goods at the time of delivery. Where goods are assembled or installed at site, it is the place of installation.
Where goods are supplied on board a conveyance, it is the location at which the goods are taken on board.
For imports the place of supply is the location of the importer; for exports it is the location outside India.
Services within India: Section 12
The default is the location of the registered recipient, and where the recipient is unregistered, the address on record, failing which the location of the supplier.
Immovable property related services, including accommodation, are at the location of the property. Restaurant, catering, personal grooming, fitness, beauty treatment and health services are at the location of performance.
Training and performance appraisal are at the recipient's location where registered, and at the place of performance where not.
Admission to and organisation of events are at the location of the event. Transportation of goods is at the recipient's location where registered, and where not, the location at which the goods are handed over. Passenger transportation is at the place where the passenger embarks.
Telecommunication, banking, insurance and advertisement services to government have their own rules, and the advertisement rule apportions the value between states.
Cross border services: Section 13
The default is the location of the recipient, and where it is not available in the ordinary course of business, the location of the supplier.
Performance based services in respect of goods physically made available, and services requiring the physical presence of the recipient, are at the place of performance. Goods temporarily imported for repairs and exported are carved out.
Immovable property related services are at the location of the property. Admission to or organisation of events is at the location of the event.
Banking, financial and intermediary services, and hiring of means of transport other than specified vehicles, are at the location of the supplier. Section 13(8)(b) is the intermediary provision, upheld in Dharmendra M. Jani and confined in operation to the IGST Act.
Transportation of goods other than by mail or courier is at the place of destination, and passenger transportation at the place of embarkation. On board services are at the first scheduled point of departure.
The discipline
Determine the place of supply at the contracting stage, in writing, for each service line. Correcting it later requires the Section 77 route and a customer conversation.
Record the recipient's location and registration status in the master, and capture the address on record for unregistered recipients.
For goods, capture the ship to address and the bill to party separately in the system; a single delivery address field is the root cause of most Section 10(1)(b) errors.
Where the determination is genuinely uncertain and the amounts are material, an advance ruling is available on determination of place of supply related questions in the manner the scheme permits, and the Principal Bench of the Tribunal hears place of supply matters.
Exhibit — The provisions most often misapplied
| Situation | Provision | Common error |
|---|---|---|
| Goods delivered to a third party on the buyer's direction | Section 10(1)(b) | Tax charged on the ship to state instead of the bill to party's location |
| Service to an unregistered individual | Section 12(2)(b) | Address on record not captured, so the supplier's location is defaulted to |
| Works or repairs at a customer's site in another state | Section 12(3) | Treated as the recipient's registered location rather than the property location |
| Event organised for a registered recipient | Section 12(7) | Event location and recipient location confused |
| Marketing support to a foreign principal | Section 13(2) or 13(8)(b) | Treated as an export without testing the intermediary definition |
| Repair of goods temporarily imported | Section 13(3) proviso | Treated as a domestic supply although the carve out applies |
Each of these produces a demand in one state and an unusable credit or an irrecoverable tax in another.
What to do on Monday
Write down the place of supply determination for every service line and product flow, once, and review it annually.
Capture bill to and ship to separately in the system, and the address on record for unregistered recipients.
Train the sales and order entry teams on Section 10(1)(b); it causes more demands than any other place of supply rule.
Where a past error is found, use the Section 77 route promptly rather than adjusting the return.
This page states the general position. A reader with a specific question on their own facts may write to the GST practice at AMLEGALS.
Write to the GST practiceQuestions we are asked on this
Can we charge IGST to be safe?
No. Charging the wrong head creates a demand for the correct head and a refund claim for the wrong one under Section 77. Determine it correctly.
What if the recipient gives a different state's GSTIN?
The place of supply for most services follows the registered recipient's location, and the GSTIN given identifies it. Record the instruction and the GSTIN.
Who decides place of supply disputes?
The Principal Bench of the Appellate Tribunal hears matters involving place of supply, and an appeal from it goes to the Supreme Court.
Is the place of supply the same as the location of the supplier?
Only where a specific provision says so, as in banking and intermediary services under Section 13.
How do we fix a past error?
Pay the correct tax and claim a refund of the wrongly paid tax under Section 77 with Section 19 of the IGST Act, without interest on the correct tax.
In this cluster
- Intermediary services: characterisation, exposure and structuring
- Export of services: the five conditions and where claims fail
- Dharmendra M. Jani: the constitutional attack on intermediary taxation, and where it stands
- Mohit Minerals: ocean freight, composite supply, and the sentence that changed GST federalism
- Import of services and reverse charge under Section 5(3) of the IGST Act
- OIDAR services: registration, compliance and the 2023 amendment
- Bill to ship to transactions and Section 10(1)(b)
- High seas sales, bonded warehouse transfers and Schedule III
- Merchant trade and out and out supplies
- Goods transport agencies: reverse charge, the rate option and place of supply
GST Insights is published by AMLEGALS for general information. Law stated as on 3 September 2026. Not advice on any particular set of facts; not an advertisement or a solicitation under Rule 36 of the Bar Council of India Rules. Readers with a question on their own facts may write to the GST practice of their own accord.