Basics
Place of Supply Under GST, Explained
Place of supply is the rule that decides which GST applies — CGST+SGST or IGST. It’s not always where the buyer sits. This guide makes it practical for goods and services.
Why place of supply matters
Place of supply determines whether a transaction is intra-state or inter-state — and therefore whether you charge CGST+SGST or IGST. Charge the wrong one and both your return and your buyer’s credit are affected. It sounds academic, but it’s one of the most common sources of GST error, especially for service businesses with clients in other states.
Place of supply for goods
For goods, place of supply is generally where the goods are delivered — where movement terminates for delivery to the recipient. So a Gujarat manufacturer shipping to a buyer in Maharashtra has an inter-state supply (IGST), even if the order was placed from elsewhere. Where there’s no movement, it’s the location of the goods at delivery.
Place of supply for services
For services the default is the location of the recipient (if registered) or the address on record. But many services have special rules — services related to immovable property are taxed where the property is, event services where the event is held, transport, restaurant and telecom services each have their own tests. Freelancers and consultants especially need to apply the right rule for out-of-state and overseas clients.
Exports and overseas clients
When the place of supply is outside India and payment is in foreign currency, a service can qualify as an export — zero-rated, and best supplied under an LUT. Determining place of supply correctly is what tells you whether you’re looking at a normal domestic supply, an inter-state supply, or a zero-rated export.
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