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CMA Final · Indirect Tax Laws and Practice

Place of Supply of Goods under IGST for CMA Final

Place of supply decides which State, or whether India, gets the tax on a supply. For goods within India, Section 10 of the IGST Act gives the rule: usually the location where movement ends, or where goods are when delivered if there is no movement. Apply the special rules first, then the general one.

What this chapter covers

This chapter covers the place of supply of goods other than imports and exports, which is Section 10 of the IGST Act, 2017. It starts with why place of supply matters. It then moves through each rule in Section 10: goods that move, goods delivered on a third person's direction (bill to ship to), goods that do not move, goods assembled or installed at site, and goods supplied on board a conveyance. It ends with the residual rule in Section 10(2) and illustrations.

The logic is simple. Location of supplier and place of supply together decide whether a supply is inter-State or intra-State. That decides whether you charge IGST or CGST plus SGST/UTGST. So this chapter sits between the levy and supply concepts and the computation of tax. It also links to input tax credit and to returns, because the wrong tax head leads to wrong credit and wrong payment.

The Section 10 text is short, so questions test careful reading. Most are small case facts with names of States, a buyer, a seller and a delivery instruction. You identify the clause and state the place of supply. Services are in Section 12, which is a different chapter. Do not mix the two.

Place of supply is a high-yield chapter because it is rule-based and the facts in a question decide the answer. A student who knows the clauses and their order can get full marks on MCQs in a minute each. The same skill is needed in written case questions on tax head, invoice and credit. Errors here carry into later working, so a clear grip on this chapter protects marks elsewhere in the paper.

Place of Supply: topics in the order to study them

  1. 1Place of Supply Basics and Scope under IGST ActYou need to know why place of supply matters and which supplies Section 10 covers before reading its clauses.
  2. 2Place of Supply of Goods Other Than Imports and ExportsThe core rule in Section 10(1)(a), where movement terminates for delivery to the recipient, is the base for every other clause.
  3. 3Supply on Direction of a Third Person (Bill to Ship to)It builds on the movement rule and changes the answer to the third person's principal place of business, so learn it right after the base rule.
  4. 4Supply Where No Movement of Goods Takes PlaceThis is the next contrast case: the place is the location of goods at delivery under clause (c).
  5. 5Goods Assembled or Installed at SiteThis special rule in clause (d) overrides the general ones, so study it once movement and no-movement cases are clear.
  6. 6Supply of Goods on Board a ConveyanceClause (e) is another special rule, tested by the point where goods are taken on board.
  7. 7Residual Rule and Illustrations of Section 10Finish with Section 10(2) and mixed illustrations, so you practise choosing between clauses, including clause (ca) for unregistered recipients.

How to prepare Place of Supply

The section is short, so you can learn it fully. The skill is choosing the right clause from the facts. Build that skill with repeated small cases.

  1. Read Section 10(1) clauses (a) to (e) and clause (ca) slowly, and write each in one line of your own words.
  2. For each clause, note the trigger fact: movement, third person direction, no movement, installation, on board, or unregistered recipient.
  3. Make a decision order: check the special rules (b), (d), (e) and (ca) before falling back on (a) or (c). Clause (ca) applies notwithstanding (a) and (c).
  4. Solve 3 to 4 short cases per clause. Write State names and the clause you used.
  5. For each case, also state whether it is inter-State or intra-State by comparing supplier location with place of supply, and name the tax head.
  6. In the last week, redo mixed MCQs without notes and explain each answer in one sentence.

Common mistakes in Place of Supply

  • Taking the place of supply as the supplier's location by default.

    Fix: Start from the clause. For most goods the answer is the delivery end, not the supplier's State.

  • Ignoring the unregistered-recipient rule in clause (ca).

    Fix: Check whether the recipient is registered. If not, clause (ca) applies notwithstanding (a) and (c), using the invoice address.

  • In bill to ship to, naming the delivery location as the place of supply.

    Fix: Identify the third person who directed delivery. The place is that person's principal place of business.

  • Applying the movement rule to installed or assembled goods.

    Fix: If goods are assembled or installed at site, clause (d) gives the place of installation or assembly.

  • Mixing Section 10 with Section 12 on services.

    Fix: Decide first whether the supply is goods or services. Section 10 is for goods only.

  • Naming the wrong tax head after finding the place.

    Fix: Compare supplier location with place of supply. Different States means IGST; same State means CGST and SGST/UTGST.

Last-day revision: Place of Supply

  • Section 10 applies to goods other than imports into or exports from India.
  • If goods move, place of supply is where movement terminates for delivery to the recipient.
  • Movement can be by the supplier, the recipient or any other person; the rule is the same.
  • Bill to ship to: the third person is deemed to have received the goods; place is that person's principal place of business.
  • If goods do not move, place of supply is the location of the goods at the time of delivery to the recipient.
  • Goods assembled or installed at site: place of supply is the place of installation or assembly.
  • Goods supplied on board a conveyance: place is where goods are taken on board.
  • Clause (ca): for supply to an unregistered person, place is the address recorded in the invoice, notwithstanding clauses (a) and (c).
  • If no address is recorded in the invoice, clause (ca) gives the supplier's location; the State name alone counts as the address.
  • If place cannot be determined, Section 10(2) says it is decided in the manner prescribed.
  • Inter-State or intra-State depends on supplier location versus place of supply.

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

Which section decides place of supply of goods within India?

Section 10 of the IGST Act, 2017. It covers goods other than those imported into or exported from India. It lists the rules for movement, third person direction, no movement, installation and on board supplies.

What is the place of supply when goods move?

It is the location of the goods when the movement terminates for delivery to the recipient. It does not matter whether the supplier, the recipient or anyone else moves them.

How does the unregistered recipient rule work?

Under clause (ca), for a supply to a person who is not registered, the place of supply is the address recorded in the invoice. If no address is recorded, it is the supplier's location. Recording just the State name is treated as recording the address.

Do I need to learn place of supply of services in this chapter?

No. This chapter is about goods under Section 10. Services fall under Section 12 and are studied separately, so keep the two sets of rules apart.