Indirect Tax Laws · Place of Supply

Place of Supply of Goods under Section 10 IGST Act (Domestic)

Updated 5 October 2026 · Fact-checked

Place of supply of goods under Section 10 decides which State or Union territory gets the tax on a domestic supply. Identify whether goods move, move on a third person's direction, do not move, or are assembled or installed at site. Then apply the matching clause to fix the place, and compare it with the supplier's location.

Understand Place of Supply of Goods under Section 10 (Domestic)

Every supply of goods needs a place of supply. It tells you the State where the supply is treated as taking place. Compare it with the location of the supplier. If both are in the same State, the supply is intra-State (CGST plus SGST/UTGST). If they are in different States, it is inter-State (IGST).

Section 10 of the IGST Act gives the rules for supplies of goods other than imports into or exports from India. Imports and exports have their own rule. The section works as a set of cases. You pick the case that fits the facts.

The main cases are:
- Goods move from supplier to recipient: place of supply is where the movement ends.
- Goods are delivered to a recipient or any other person on the direction of a third person (bill to, ship to): the third person who directed the delivery, the bill-to party, is treated as having received the goods. The place is the principal place of business of that third person.
- Goods do not move: place of supply is the location of the goods at the time of delivery to the recipient.
- Goods are assembled or installed at site: place of supply is the place of installation or assembly.

There are also special rules for goods supplied on board a conveyance, covered in a separate topic. Always read the facts for one thing first: do the goods move, and who decides where they go?

Key rules to remember

Goods move (Section 10(1)(a)): Place of supply = location of the goods at the time at which the movement terminates for delivery to the recipient; Applies where the supply involves movement of goods, whether by the supplier, the recipient or any other person.
Delivery on direction of a third person (Section 10(1)(b)): Place of supply = principal place of business of the third person who gave the direction; Applies where goods are delivered by the supplier to a recipient or any other person on the direction of a third person (the bill-to party), whether before or during movement, by transfer of documents of title or otherwise. The goods are deemed received by the third person, and the place is that person's principal place of business.
No movement (Section 10(1)(c)): Place of supply = location of the goods at the time of delivery to the recipient; Applies where the supply does not involve movement of goods.
Assembly or installation at site (Section 10(1)(d)): Place of supply = place of installation or assembly; Applies where goods are assembled or installed at site.
Intra-State or inter-State test: Location of supplier and place of supply in the same State = intra-State; in different States = inter-State; Use this after fixing the place of supply.

How to solve Place of Supply of Goods under Section 10 (Domestic) questions

Use the same sequence for every case question. Write the facts that matter, name the clause, then apply it.

1Confirm the supply is of goods and is not an import into or export from India. If it is an import or export, Section 10 does not apply.
2Note the location of the supplier. You will need it for the final intra-State or inter-State call.
3Ask: do the goods move? If they do not move, go to the no-movement rule.
4If they move, ask: did a third person (the bill-to party) direct delivery to the recipient or another person? If yes, use the third-person rule.
5If the goods are being assembled or installed at the buyer's site, use the installation rule.
6Apply the clause and state the place of supply in one line, naming the State.
7Compare the place of supply with the supplier's location and conclude intra-State or inter-State, naming the tax charged.
8Write the answer in provision, facts, conclusion form.

Quickest way: Four-question shortcut

When to use it: Use when a question gives a short scenario and asks only for place of supply or the type of tax.

Underline every State named in the facts and mark which is the supplier, buyer and delivery point.
Ask: is there a third person who directed the delivery? If yes, place of supply is that directing person's principal place of business.
If not, ask: do the goods move? If yes, use the end point of movement. If no, use where the goods are at delivery.
If installation or assembly is involved, use the site.
Compare with the supplier's State and write IGST or CGST plus SGST/UTGST.

Common mistakes in Place of Supply of Goods under Section 10 (Domestic)

Taking the delivery State as the place of supply in a bill to ship to case.
Students follow the physical movement and forget the third-person rule.
Fix: When a third person (the bill-to party) directs delivery, the place of supply is that person's principal place of business, not the ship to address.
Confusing the supplier's location with the place of supply.
Both are States in the facts and are used loosely.
Fix: Fix the place of supply first with Section 10. Then compare it with the supplier's location. They are separate steps.
Using the movement rule when the goods are installed at site.
Goods do travel, so the movement rule feels natural.
Fix: If the goods are assembled or installed at site, the place of installation governs.
Treating a no-movement supply as depending on the buyer's address.
Students assume the recipient's registered State decides tax.
Fix: For no movement, use where the goods are located at the time of delivery.
Applying Section 10 to imports or exports.
The rules look general, and the topic title says domestic only loosely.
Fix: Section 10 applies to supplies of goods other than imports into or exports from India. Imports and exports follow Section 11 of the IGST Act.

Worked examples

Example 1

Alpha Traders of Pune, Maharashtra sells machinery to Beta Ltd, whose principal place of business is in Chennai, Tamil Nadu. Beta Ltd directs Alpha to deliver the machinery to Gamma Ltd in Hyderabad, Telangana, and Alpha ships it there directly. Beta Ltd is billed. Determine the place of supply and the tax payable.

Show the solution

The supply is of goods and is not an import or export, so Section 10 applies.
Alpha, the supplier, is located in Maharashtra.
The goods move, but delivery is to Gamma Ltd on the direction of Beta Ltd, the bill-to party. Beta Ltd is the third person who directed delivery, so the rule in Section 10(1)(b) applies.
Under that rule, Beta Ltd is deemed to have received the goods. The place of supply is Beta Ltd's principal place of business, which is Tamil Nadu.
Supplier's location is Maharashtra and place of supply is Tamil Nadu. They are different States, so the supply is inter-State.

Answer: Place of supply is Tamil Nadu (Chennai). The supply is inter-State, so Alpha charges IGST.

Example 2

Delta Engineering of Ahmedabad, Gujarat supplies a conveyor system to Epsilon Foods, registered in Mumbai, Maharashtra. Delta assembles and installs the system at Epsilon's factory in Nashik, Maharashtra. Determine the place of supply and the nature of the supply.

Show the solution

The supply is of goods and is not an import or export, so Section 10 applies.
Delta's location is Gujarat.
The goods are assembled and installed at site, so the installation rule under Section 10(1)(d) applies.
The place of supply is the place of installation, which is Nashik, Maharashtra.
Supplier's location is Gujarat and place of supply is Maharashtra. They differ, so the supply is inter-State.

Answer: Place of supply is Maharashtra (Nashik). The supply is inter-State and attracts IGST.

Exam tips

In bill to ship to questions, draw three boxes: supplier, bill-to party who directs, and delivery point. The place of supply is the middle box.
Always finish with the tax type. Examiners reward the link from place of supply to IGST or CGST plus SGST/UTGST.
Quote the clause by its sub-section only if you are sure of it. Otherwise describe the rule in words and apply it.
For case-scenario MCQs, check for installation, no movement and third-person direction before picking an answer. Distractors usually use the delivery State.
Write answers in provision, facts, conclusion order, and name each State explicitly.

Practice questions from Place of Supply

Place of Supply of Goods under Section 10 (Domestic) 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 of Goods under Section 10 (Domestic): frequently asked questions

What is the place of supply when goods are shipped on the buyer's direction to a third person?

Under Section 10(1)(b), the person who directs the delivery (the bill-to party) is treated as having received the goods. The place of supply is that person's principal place of business, not the ship to address.

What is the place of supply when goods do not move?

It is the location of the goods at the time of delivery to the recipient. The recipient's own registered address does not decide it.

Does Section 10 apply to imports and exports?

No. Section 10 applies to supplies of goods other than imports into or exports from India. Imports and exports are covered by a separate section of the IGST Act.

How does place of supply decide whether GST is IGST or CGST plus SGST?

Compare the place of supply with the supplier's location. If both are in the same State, the supply is intra-State and CGST plus SGST/UTGST applies. If they differ, the supply is inter-State and IGST applies.