CA Intermediate · Taxation

Place of Supply: formula sheet

Full chapter guide

Key formulas

Inter-State supply test: Location of supplier ≠ Place of supply (different State/UT) → IGST. Exception: supply to or by an SEZ developer or SEZ unit → deemed inter-State → IGST, whatever the locations; Section 7 of the IGST Act. A supply of goods or services or both to or by an SEZ developer or SEZ unit is a deemed inter-State supply under Section 7(5)(b). This rule applies regardless of the location comparison.
Intra-State supply test: Location of supplier = Place of supply (same State/UT) → CGST + SGST/UTGST; Section 8 of the IGST Act.
Goods with movement (Section 10(1)(a)): Place of supply = location of goods when movement terminates for delivery to the recipient; It does not matter who arranges the transport: supplier, recipient or anyone else.
Goods delivered on a third person's direction (Section 10(1)(b)): Place of supply = principal place of business of the third person; Applies where the supplier delivers the goods to a recipient or any other person on the direction of a third person, whether acting as an agent or otherwise, before or during movement of goods, either by way of transfer of documents of title to the goods or otherwise. The roles are: the supplier delivers; the person who receives the goods physically is the recipient or other person (the ship-to party); and the person who gives the direction is the third person. The place of supply is the third person's principal place of business. This is the bill-to ship-to case: the buyer who places the order and directs the supplier to deliver to its own customer is the third person (the bill-to party), so the buyer's principal place of business is the place of supply.
Goods without movement (Section 10(1)(c)): Place of supply = location of the goods at the time of delivery to the recipient; Example: goods that stay in a warehouse and are delivered there.
Goods assembled or installed at site (Section 10(1)(d)): Place of supply = place of installation or assembly; Applies when the supply includes installation or assembly at the recipient's site.
Goods supplied on board a conveyance (Section 10(1)(e)): Place of supply = location where the goods are taken on board; In practice, a conveyance means a vessel, aircraft, train or motor vehicle. The test is where the goods are taken on board, not where the journey ends.
Section 10 vs Section 12: Section 10: goods (not import/export). Section 12: services where supplier and recipient are both in India.; Section 11 is for goods imported or exported. Section 13 is for services where the supplier or recipient is outside India.

Quick revision

Place of supply decides whether a supply is intra-State (CGST + SGST/UTGST) or inter-State (IGST).
Compare the location of supplier with the place of supply. Same State means intra-State. Different States means inter-State.
Under Section 7 of the IGST Act, a supply of goods in the course of import into India is inter-State (Section 7(2)), and so is a supply of imported services (Section 7(4)). A supply where the supplier is in India and the place of supply is outside India (export) is inter-State under Section 7(5)(a). A supply to or by an SEZ developer or SEZ unit is also inter-State under Section 7(5)(b).
Section 10 of the IGST Act covers the place of supply of goods other than imports and exports.
Section 11 of the IGST Act covers the place of supply of goods imported into or exported from India.
Section 12 applies to services where both supplier and recipient are located in India.
Section 13 applies to services where the location of the supplier or the location of the recipient is outside India.
Always check the special rules before using the general rule.
For goods that move, the place of supply is where the movement ends (Section 10(1)(a)).
Where goods are delivered by the supplier to a recipient or any other person on the direction of a third person (whether acting as agent or otherwise), before or during movement, it is deemed that the third person has received the goods. The place of supply is then the principal place of business of the third person (Section 10(1)(b)).
For goods with no movement, the place of supply is where the goods are at the time of delivery (Section 10(1)(c)).
For goods assembled or installed at site, the place of supply is the place of installation or assembly (Section 10(1)(d)).
For goods supplied on board a conveyance, the place of supply is the location where the goods are taken on board (Section 10(1)(e)).
Section 12(2) is the general rule for all services not covered by the special rules in sub-sections (3) to (14). Registered recipient: the location of the recipient. Unregistered recipient: the location of the recipient where the address is on record, otherwise the location of the supplier.
For services linked to immovable property, the place of supply is where the property is located.
Write the section number, the facts and the tax type in descriptive answers.

Common mistakes

Using the buyer's billing address as the place of supply for goods that move. Fix: For goods that move, use where movement terminates. The buyer's billing address is never the test. Only in a third-person direction case does the place of supply become the third person's principal place of business.
Ignoring the third person in a bill-to ship-to case and using the delivery State. Fix: Look for the phrase "on the direction of" or "deliver to X as instructed by Y". If present, apply Section 10(1)(b).

Exam tips

Check the first word of the question: goods or services. This one decision picks Section 10 or Section 12 and avoids wrong-section answers.
Underline the supplier's State, the delivery point and any third person in the facts. Most questions are solved from these three items.
Always end with the tax type (IGST or CGST plus SGST/UTGST). Examiners look for this conclusion, and it is the usual MCQ answer.
In written answers quote the section and clause, for example Section 10(1)(b), before the working. Quote a clause number only when you are sure of it, and otherwise describe the rule in words.
Watch for SEZ, installation at site and on-board supplies. These small details are common in 2-mark MCQs.