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Direct and Indirect Taxation · Introduction to GST Law

Key Definitions under the IGST Act, 2017 for CMA Inter

Updated 10 October 2026 · Fact-checked

The IGST Act, 2017 defines terms such as import and export of goods and services, inter-State supply, and place of supply. To solve questions, fix the location of the supplier, the location of the recipient and the place of supply. Then test them against the conditions for import, export or inter-State supply.

Understand Key Definitions under the IGST Act, 2017

IGST is levied on inter-State supplies and on imports. Before you can say whether a supply attracts IGST, you must classify it. The IGST Act's definitions give you the tests. Most exam questions are really tests of three facts: where the supplier is, where the recipient is, and where the supply is deemed to take place.

The CGST Act, 2017 defines location of the supplier of services and location of the recipient of services, and the IGST Act uses these ideas. The supplier's location is the registered place of business from which the supply is made. If the supply is made from another place (a fixed establishment elsewhere), it is that place. If there is more than one establishment, it is the one most directly concerned with the supply. If there is none, it is the supplier's usual place of residence. The recipient's location is worked out in the same way, for the place where the supply is received.

Place of supply is the place fixed by the rules in Chapter V of the IGST Act. It is not always the same as where the recipient is. Do not guess it. Apply the relevant rule for goods or services.

Import of services means the supplier is outside India, the recipient is in India, and the place of supply is in India. Export of services is the reverse picture, but with extra conditions: the supplier is in India, the recipient is outside India, the place of supply is outside India, payment is received in convertible foreign exchange (or in Indian rupees where RBI permits), and the supplier and recipient are not merely establishments of a distinct person. Import of goods and export of goods are different. They are about goods physically brought into India or taken out of India, and the services location tests do not apply to them.

An import of services is treated as an inter-State supply, so it attracts IGST. A supply is generally inter-State when the supplier's location and the place of supply are in different States or Union territories. The CGST Act also says that intra-State supply has the meaning given in section 8 of the IGST Act. A "State" for GST includes a Union territory with legislature, and each Union territory is treated as a separate territory.

Key rules to remember

Import of services
Supplier outside India AND Recipient in India AND Place of supply in India
All three must hold. If the place of supply is outside India, it is not an import of services.
Export of services
Supplier in India + Recipient outside India + Place of supply outside India + Payment in convertible foreign exchange (or INR where RBI permits) + Not merely establishments of a distinct person
Fail any one condition and the supply is not an export of services, so it is not zero-rated as an export.
Inter-State supply (basic test)
Location of supplier and place of supply in different States/UTs
Imports are also treated as inter-State. If both are in the same State or UT, the supply is intra-State.
Location of supplier of services (CGST s.2(71))
Registered place of business → fixed establishment elsewhere → establishment most directly concerned → usual place of residence
Apply in this order. The location of the recipient (s.2(70)) follows the same ladder, using the place where the supply is received.
Usual place of residence (CGST s.2(113))
Individual: where he ordinarily resides. Others: where incorporated or legally constituted
This is the last fallback when no business place or fixed establishment exists.

How to solve Key Definitions under the IGST Act, 2017 questions

Use this method for any question that asks you to classify a supply as import, export, inter-State or intra-State under the IGST framework.

  1. 1Identify whether the supply is of goods or services. Import and export of services use the location tests. Goods depend on movement into or out of India.
  2. 2Find the location of the supplier. Use the ladder: registered place of business, fixed establishment, establishment most directly concerned, usual place of residence.
  3. 3Find the location of the recipient using the same ladder, for the place where the supply is received.
  4. 4Determine the place of supply using the Chapter V rule that fits the facts. Do not assume it equals the recipient's location without checking.
  5. 5Tick each condition for import of services or export of services. For export, check all five, including payment in convertible foreign exchange and the distinct person condition.
  6. 6Decide inter-State or intra-State by comparing the supplier's location with the place of supply. Treat imports as inter-State.
  7. 7State the tax consequence: IGST for inter-State supplies and imports. Write the conclusion in one clear line.
  8. 8 Cite the fact that decided the case, for example 'payment was not in convertible foreign exchange, so not export'.

Quickest way: Three-location check

When to use it: Use in MCQs and short case questions where you have under two minutes.

  1. Write S, R and P (supplier, recipient, place of supply) as India or abroad.
  2. S abroad, R India, P India: import of services.
  3. S India, R abroad, P abroad: check payment in foreign exchange and the distinct person condition before calling it export.
  4. If S and P are in different States, it is inter-State. If the same State, it is intra-State.
  5. If any of the facts is missing in an MCQ, look for the option that matches the strict definition, not the general idea.

Common mistakes in Key Definitions under the IGST Act, 2017

  • Calling every supply from a foreign supplier an import of services.

    Students look only at the supplier's location.

    Fix: Also check that the recipient is in India and the place of supply is in India. All three conditions are needed.

  • Treating a service to a foreign client as export without checking payment.

    The foreign client makes it look obvious.

    Fix: Check that payment is received in convertible foreign exchange (or INR where RBI permits). Also check the place of supply is outside India.

  • Ignoring the distinct person condition in export of services.

    It is one of the less obvious conditions and is often hidden in the facts.

    Fix: If the Indian entity and the foreign entity are merely establishments of the same person, the supply does not qualify as an export of services.

  • Confusing import of goods with import of services.

    Both use the word import and both attract IGST.

    Fix: Goods are about physical movement into India. Services are tested by the location of the supplier and recipient and the place of supply.

  • Using the place of registration instead of the place where the supply is received or made.

    Students assume the head office is always the location.

    Fix: If the supply is made from or received at a fixed establishment elsewhere, that establishment is the location. If several establishments exist, use the one most directly concerned.

  • Assuming place of supply is the same as location of the recipient in every case.

    It holds for many B2B services, so students over-generalise.

    Fix: Always check the specific Chapter V rule. Some supplies have special rules.

Worked examples

Example 1

Anand & Co., a cost accountancy firm registered in Pune, provides consultancy to Brightline Inc., a company in the USA, which has no establishment in India. The place of supply is outside India. Brightline pays in US dollars, which are received through banking channels. The two are not establishments of the same person. Is this an export of services?

Show the solution
  1. Supplier location: its registered place of business in Pune, so in India.
  2. Recipient location: the USA, outside India.
  3. Place of supply is given as outside India.
  4. Payment is received in convertible foreign exchange.
  5. The supplier and recipient are not merely establishments of a distinct person.
  6. All five conditions for export of services are met.

Answer: Yes, it is an export of services.

Example 2

Kaveri Textiles, registered in Coimbatore, engages Lion Designs Pte Ltd of Singapore for design services. Lion Designs has no place of business in India. The place of supply is in India. Classify the supply and state the tax consequence.

Show the solution
  1. Supplier location: Singapore, outside India.
  2. Recipient location: Coimbatore, in India.
  3. Place of supply is given as in India.
  4. All three conditions for import of services are met.
  5. An import of services is treated as an inter-State supply.
  6. So IGST applies to this supply.

Answer: It is an import of services, treated as an inter-State supply, and it attracts IGST.

Exam tips

  • In MCQs, the trap is usually one missing condition, such as payment in rupees without RBI permission or a distinct person link. Read the facts for it.
  • In written answers, list the conditions first, then apply each one to the facts in a separate line. Step marks follow this layout.
  • Use the exact terms: location of supplier, location of recipient, place of supply. Do not write 'place of service'.
  • Keep goods and services apart. Do not apply the services location tests to goods.
  • End every case answer with the classification and the tax consequence (IGST or not).

Practice questions from Introduction to GST Law

Key Definitions under the IGST Act, 2017: frequently asked questions

What is the difference between import of goods and import of services?

Import of goods means bringing goods into India from outside India. Import of services is tested by location: the supplier is outside India, the recipient is in India and the place of supply is in India. Both attract IGST.

What are the conditions for export of services under the IGST Act?

The supplier is in India, the recipient is outside India, and the place of supply is outside India. Payment is received in convertible foreign exchange or in Indian rupees where RBI permits. The supplier and recipient must not be merely establishments of a distinct person.

How do I find the location of the supplier of services?

Use the CGST Act ladder. It is the registered place of business if the supply is made from there, otherwise the fixed establishment elsewhere, otherwise the establishment most directly concerned, otherwise the usual place of residence.

Is import of services an inter-State supply?

Yes. Import of services is treated as an inter-State supply, so IGST is levied on it.