Indirect Tax Laws · Place of Supply

Place of Supply: Meaning and Framework under IGST Act

Updated 5 October 2026 · Fact-checked

Place of supply is the legal location where a supply is treated as made for GST. Compare it with the supplier's location: same State or UT means intra-State (CGST plus SGST/UTGST), different means inter-State (IGST). Sections 10 and 11 fix it for goods, Sections 12 and 13 for services.

Understand Place of Supply: Meaning and Framework under IGST Act

GST is a destination-based tax. The State where goods or services are consumed should get the tax. But a supplier in one State may sell to a buyer in another. The law needs a fixed rule to say which State the supply belongs to. That rule is the place of supply.

The place of supply is not always where the supplier sits or where the buyer's office is. It is a legal location found by applying the IGST Act. The location of the supplier is a separate fact. It is the place of the supplier's registered or fixed establishment from which the supply is made, with fallback rules in the Act's definitions.

The two locations are then compared. If the supplier's location and the place of supply are in the same State or Union Territory, the supply is intra-State. CGST and SGST (or UTGST) apply. If they are in different States or UTs, the supply is inter-State. IGST applies. A supply from India to a place outside India, and an import into India, are also treated as inter-State.

The IGST Act splits the rules by what is supplied and by where the parties are. Section 10 covers goods moving within India. Section 11 covers goods that are imported or exported. Section 12 covers services when both supplier and recipient are located in India. Section 13 covers services when the supplier or the recipient is located outside India.

In each section, there is a default rule and then special rules for specific cases. Always check the special rules first. Use the default only when no special rule fits. This order is the key to scoring in case-scenario questions.

Key rules to remember

Intra-State supply test: Location of supplier and place of supply in the same State/UT → intra-State → CGST + SGST/UTGST; Both locations must be in the same State or the same Union Territory.
Inter-State supply test: Location of supplier and place of supply in different States/UTs → inter-State → IGST; Section 7 of the IGST Act deems import of goods or services into India, and supply to or by an SEZ developer or unit, to be inter-State supplies. This deeming comes from Section 7, not from the place-of-supply sections.
Section map: Sec 10: goods (other than import/export) | Sec 11: goods imported or exported | Sec 12: services, both parties in India | Sec 13: services, supplier or recipient outside India; Pick the section first, then the rule inside it.
Section 10 – goods involving movement: Goods moved → place where movement ends (delivery to recipient); If goods are delivered to another person on the recipient's direction, whether the recipient acts as an agent or otherwise, the recipient is deemed to have received the goods. The place of supply is then the recipient's principal place of business.
Section 10 – goods without movement and installation cases: No movement → location of goods at delivery | Goods assembled or installed at site → place of installation; Check these before the default rule.
Section 12 – default rule for services: Registered recipient → location of recipient | Unregistered recipient → location of recipient if address is on record, else location of supplier; Specific services have their own rules. For example, services directly related to immovable property have a separate rule in Section 12(3). Restaurant and catering, personal grooming, fitness, beauty treatment and health services (including cosmetic and plastic surgery) also have a specific rule of their own in Section 12: the place of supply is the location where the services are actually performed. Do not stretch this to all services performed at a location.
Section 13 – default rule for services: Place of supply = location of recipient of services; if not available in the ordinary course, location of supplier; Specific services, for example those on goods made physically available or those needing the physical presence of an individual, have separate rules. These two rules do not apply in certain cases, such as services supplied from a remote location by electronic means, or goods temporarily imported for repairs and exported after repairs without any other use.
Services linked to immovable property: Place of supply = where the immovable property is located. Proviso: if the immovable property, boat or vessel is located outside India → location of the recipient; This rule covers services supplied directly in relation to immovable property. The covered services are listed in the Act, such as architects, interior decorators, estate agents and lodging accommodation, and that list is illustrative, so do not limit it to these. Both Section 12 and Section 13 have such a rule. Under Section 12(3), the proviso applies only where the property, boat or vessel is outside India. Then the place of supply is the location of the recipient.

How to solve Place of Supply: Meaning and Framework under IGST Act questions

Use this order for any place-of-supply question. It keeps you from jumping to the default rule too early.

1Identify what is supplied: goods or services. This decides whether you use Sections 10-11 or Sections 12-13.
2Fix the location of the supplier from the facts. Use the registered or fixed establishment from which the supply is made.
3Check whether any party is outside India or whether goods are imported or exported. If yes, use Section 11 for goods or Section 13 for services. If no, use Section 10 or Section 12.
4Scan the facts for a special rule: third-person delivery, no movement, installation, immovable property, restaurant or performance of services, or goods on a conveyance.
5If no special rule fits, apply the default rule of that section. For services, check whether the recipient is registered and whether an address is on record.
6Write the place of supply as a State or UT name, or as 'outside India'.
7Compare it with the supplier's location: same State/UT means intra-State, different means inter-State. Then name the tax: CGST + SGST/UTGST or IGST.
8Write the answer in provision-facts-conclusion form so each mark is easy to award.

Quickest way: Two-location comparison with a section check

When to use it: Use this for 2-3 mark MCQs and short case scenarios where you must name the tax quickly.

Underline the supplier's State and the delivery or recipient State in the case.
Tag the supply as goods or services, then as domestic or cross-border.
Look for one trigger phrase: 'on the direction of', 'installed at', 'immovable property', 'unregistered recipient', 'outside India'.
If a trigger is there, apply its rule. If not, apply the default of the matched section.
Compare the two States. Different means IGST; same means CGST + SGST/UTGST.

Common mistakes in Place of Supply: Meaning and Framework under IGST Act

Treating the place of supply as the same thing as the location of the supplier.
Both are usually the same in simple sales, so students stop separating them.
Fix: Write both locations on separate lines. Decide the tax only after comparing them.
Taking the billing address as the place of supply for goods, even when goods are delivered elsewhere.
Students assume the buyer's invoice address decides the State.
Fix: For moving goods, the place where movement ends is the key. If a third person receives the goods on the buyer's direction, whether the buyer acts as an agent or otherwise, the buyer is deemed to have received them and its principal place of business is the place of supply.
Applying the Section 12 default rule without checking for a special rule such as immovable property.
The default rule is easy to remember, so it is used first.
Fix: Scan the facts for a special rule first. Use the default only when none applies.
Using Section 12 for a service where the recipient is outside India.
Students mix up the Section 12 and 13 trigger conditions.
Fix: If either the supplier or the recipient is outside India, use Section 13. Use Section 12 only when both are in India.
Calling a supply intra-State because the buyer and the supplier are both registered in the same State, even though the place of supply is another State.
Students compare the parties' States instead of the supplier's location and the place of supply.
Fix: The comparison is always between the supplier's location and the place of supply, never between the two parties.
Forgetting that imports and supplies involving an SEZ are treated as inter-State.
Students focus on the State names and miss the special deeming rule.
Fix: Check for import, export or SEZ in the facts. If present, the supply is inter-State and IGST applies.

Worked examples

Example 1

Alpha Traders, registered in Gujarat, sells machine parts to Beta Ltd, whose principal place of business is in Maharashtra. On Beta's written direction, Alpha delivers the goods directly to Gamma Ltd in Tamil Nadu. Determine the place of supply and the tax applicable.

Show the solution

Provision: Section 10 of the IGST Act applies as these are goods supplied within India. Where goods are delivered to a third person on the direction of the recipient, the recipient is deemed to have received the goods. The place of supply is then the principal place of business of the recipient.
Facts: Beta directed delivery to Gamma, a third person. Beta's principal place of business is in Maharashtra. The goods physically end in Tamil Nadu, but this does not decide the place of supply here.
Place of supply: Maharashtra. Location of supplier: Gujarat.
Comparison: Gujarat and Maharashtra are different States, so this is an inter-State supply.

Answer: The place of supply is Maharashtra. The supply is inter-State, so Alpha charges IGST.

Example 2

Delta Architects, registered in Delhi, provides architectural design services to Echo Pvt Ltd, a registered company in Delhi. The services relate to a plot of land located in Goa. Determine the place of supply and the type of tax.

Show the solution

Provision: Both supplier and recipient are located in India, so Section 12 applies. Section 12(3) has a special rule for services directly in relation to immovable property. Architects' services are among the services it lists. The place of supply is where the immovable property is located. The proviso for property outside India does not apply here.
Facts: The plot is in Goa, which is in India. The recipient being registered in Delhi would give Delhi under the default rule, but the special rule overrides the default.
Place of supply: Goa. Location of supplier: Delhi.
Comparison: Delhi and Goa are different, so this is an inter-State supply.

Answer: The place of supply is Goa. The supply is inter-State, so Delta charges IGST.

Exam tips

Write the section number and the rule in words in the provision part of your answer. The marks usually sit in naming the right rule.
In case-scenario MCQs, look for the one phrase that triggers a special rule. The other facts are often decoys.
Always state two things in the conclusion: the place of supply and the tax charged (IGST or CGST + SGST/UTGST).
Check the current text of Sections 12 and 13 in the latest ICAI study material and amendments before the exam. Some special rules have been changed or omitted in recent years.

Practice questions from Place of Supply

Place of Supply: Meaning and Framework under IGST Act 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: Meaning and Framework under IGST Act: frequently asked questions

What is the difference between location of supplier and place of supply?

The location of the supplier is a fact: where the supplier's establishment is. The place of supply is a legal result found by applying Sections 10 to 13. Comparing the two decides whether the supply is intra-State or inter-State.

Why is place of supply important in GST?

It decides whether CGST and SGST/UTGST or IGST is charged. It also decides which State receives the tax, since GST is a destination-based tax. It is also needed to decide whether a supply is an export or an import.

Which sections of the IGST Act deal with place of supply?

Section 10 covers goods moving within India and Section 11 covers imports and exports of goods. Section 12 covers services where both parties are in India. Section 13 covers services where the supplier or the recipient is outside India.

Can the place of supply be different from where the goods are delivered?

Yes. If goods are delivered to a third person on the recipient's direction, the place of supply is the recipient's principal place of business, not the delivery State. This is a frequent exam point.