Skip to content

CA Final · Indirect Tax Laws

Place of Supply for CA Final Indirect Tax (GST)

Place of supply decides which State's tax applies to a supply. For goods under Section 10 of the IGST Act, first check whether the goods move, then apply the rule for movement, third-party direction, no movement, installation or conveyance. Compare the result with the supplier's location: different States means inter-state supply, so IGST applies.

What this chapter covers

Place of supply (POS) is the rule that tells you where a supply is treated as taking place. GST is a destination-based tax, so the State where consumption is deemed to happen gets the tax. The IGST Act has separate rules for goods and for services. Section 10 covers goods in domestic supplies. Section 11 covers goods that are imported or exported. Sections 12 and 13 cover services.

This chapter has one practical purpose. You find the POS, compare it with the location of the supplier, and decide whether the supply is inter-state or intra-state. That decides whether you charge IGST or CGST plus SGST/UTGST. The inter-state and intra-state tests are in Sections 7 and 8 of the IGST Act. Those sections work only after you have fixed the POS.

The chapter connects to the rest of Part I of Paper 5. It feeds into the levy and charge of tax, input tax credit, and the invoice and return treatment of IGST and CGST/SGST. It also sits next to the services POS rules and the export and import rules. In case-study questions, an error in the POS flows into the tax computation, so one wrong step can cost the whole answer.

Place of supply is a short chapter, but the rules are exact. Case-scenario MCQs and written problems use it to test whether you can apply a rule to facts such as who directs delivery, where the goods are when delivery happens, and where they are loaded onto a train or aircraft. You also need it in Paper 6 whenever a supply involves several States. Once the rules are clear, you can score reliably in this chapter, and you can use the same logic in later chapters on tax computation and ITC.

Place of Supply: topics in the order to study them

  1. 1Place of Supply: Meaning and Framework under IGST ActStart here to learn what POS means, why it matters, and how Sections 10 to 13 divide goods, services and cross-border supplies.
  2. 2Place of Supply of Goods under Section 10 (Domestic)This is the core rulebook. Learn the clauses of Section 10(1) in order: (a) movement, (b) direction by a third person, (c) no movement, (d) assembly or installation at site, and (e) supply on board a conveyance.
  3. 3Supply of Goods on Board a Conveyance and Special CasesSection 10(1)(e) is a special rule for goods supplied on board a conveyance. Section 10(2) is a residual provision. It applies only where the POS cannot be determined under sub-section (1). Both are easier to remember once the general rules are clear.
  4. 4Section 10 Practical Problems and Inter-State vs Intra-State SupplyFinish with applied problems that combine POS with the supplier's location to decide the tax type.

How to prepare Place of Supply

Treat this chapter as a decision flow. Do not memorise it as a list of clauses. Practise until you can run the flow in your head within a minute.

  1. Write the framework in one line: Section 10 is for domestic goods, Section 11 is for imports and exports, and Sections 12 and 13 are for services.
  2. Learn Section 10(1) as a series of questions, with the clause beside each. Do the goods move? That is clause (a). Does a third person direct the delivery? That is clause (b). Is there no movement? That is clause (c). Are the goods assembled or installed at site? That is clause (d). Are they supplied on board a conveyance? That is clause (e).
  3. For each rule, write one short example in your own words. For example: A in Delhi sells goods to B. B directs A to deliver the goods to C in Jaipur, and B then sells the goods to C. Assume B's principal place of business is in Maharashtra. In the supply from A to B, B is the third person who directs the delivery. Under Section 10(1)(b), B is treated as having received the goods, so the POS for this supply is B's principal place of business, which is Maharashtra on this assumption. Delhi and Maharashtra are different States, so the A to B supply is inter-state and IGST applies. The supply from B to C is a movement case under Section 10(1)(a), so its POS is where the movement ends, Jaipur in Rajasthan. B's location is Maharashtra and the POS is Rajasthan. These are different States, so the B to C supply is also inter-state. IGST applies on both supplies.
  4. Learn the residual rule in Section 10(2): where the POS cannot be determined under sub-section (1), it shall be determined in the manner as may be prescribed. Know this exists, but do not guess its content.
  5. Practise the second step on every problem: compare the supplier's location with the POS. Different States means inter-state (IGST). The same State means intra-state (CGST plus SGST/UTGST).
  6. Solve at least ten short case scenarios. For each one, write the facts, the rule, the POS and the conclusion in that order. This matches how you should write the answer in the exam.
  7. Revise by redoing the problems without looking at your notes. Check the supplier location, the recipient and the direction of delivery each time.

Common mistakes in Place of Supply

  • Using the recipient's address on the invoice as the POS

    Fix: Use the movement rule first. Where goods move, the POS is where movement ends. The billing address matters only in the third-person direction case.

  • Ignoring the third person in bill-to-ship-to cases

    Fix: If a third person directs delivery, treat that person as the recipient. For that supply, the POS is that person's principal place of business under Section 10(1)(b).

  • Applying the movement rule to goods that are installed or assembled at site

    Fix: Check whether the contract requires assembly or installation at site. If it does, Section 10(1)(d) applies and the POS is the place of installation or assembly.

  • Stopping at the POS and not deciding IGST or CGST/SGST

    Fix: Always compare the POS with the supplier's location, then state the tax type in the conclusion.

  • Mixing up Section 10 and Section 11

    Fix: Check whether the supply is domestic, or an import or export. Section 10 is for domestic supplies. Section 11 is for imports and exports.

  • Using the conveyance rule when the goods are not supplied on board

    Fix: Section 10(1)(e) applies only to goods supplied on board a conveyance. Check that the goods are actually supplied on the conveyance. If they are, the POS is the location at which the goods are taken on board. If not, go back to the other clauses.

Last-day revision: Place of Supply

  • POS decides the tax type: POS in a different State from the supplier means IGST.
  • Section 10 applies to goods in domestic supplies. Imports and exports fall under Section 11.
  • Section 10(1)(a), movement: where goods move, the POS is where the movement ends for delivery to the recipient.
  • Section 10(1)(b), third-person direction: where goods are delivered by the supplier to a recipient or any other person on the direction of a third person, the third person is treated as having received the goods. The POS is that person's principal place of business.
  • Section 10(1)(c), no movement: where delivery of goods does not involve movement, the POS is the location of the goods at the time of delivery to the recipient.
  • Section 10(1)(d), assembly or installation: for goods assembled or installed at site, the POS is the place of installation or assembly.
  • Section 10(1)(e), conveyance: for goods supplied on board a conveyance (vessel, aircraft, train or motor vehicle), the POS is the location at which the goods are taken on board.
  • If the POS cannot be determined under sub-section (1), Section 10(2) applies, and it is determined in the manner as may be prescribed.
  • Inter-state means the supplier's location and the POS are in different States. Intra-state means they are in the same State.
  • Imports and exports are not Section 10 cases. Section 7(2) treats the supply of goods imported into India, until they cross the customs frontier, as an inter-state supply. Under Section 11(a), the POS for imported goods is the location of the importer. Under Section 11(b), the POS for goods exported out of India is the location outside India.
  • Always identify the supplier's location, the recipient, and who directs the delivery before choosing a rule.
  • In the written answer, follow the order: provision, facts, conclusion.

Place of Supply practice questions

Place of Supply in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Place of Supply: frequently asked questions

What is place of supply of goods under Section 10 of the IGST Act?

It is the rule that fixes where a domestic supply of goods is treated as taking place. The answer depends on facts such as whether goods move, who directs the delivery, and whether installation is involved. The result decides whether the supply is inter-state or intra-state.

How do I decide between IGST and CGST plus SGST in a problem?

Find the supplier's location and the place of supply. If they are in different States, the supply is inter-state and IGST applies. If they are in the same State, it is intra-state and CGST plus SGST/UTGST applies.

What is the place of supply in a bill-to-ship-to transaction?

Take an example: A sells to B, and B directs A to deliver the goods to C. For A's supply to B, B is the third person who directs the delivery. B is treated as having received the goods, so the POS is B's principal place of business under Section 10(1)(b), not the delivery address. B's separate supply to C is a movement case under Section 10(1)(a), and its POS is where the movement ends.

How should I write a place of supply answer in the exam?

Write the relevant provision in plain words, apply it to the facts, and state the conclusion on POS and tax type. Keep each part short. State the supplier location and the POS clearly, because that is where marks are given.