Tax Laws and Practice · Time, Value and Place of Supply

Place of Supply of Goods under the IGST Act

Updated 11 October 2026 · Fact-checked

Place of supply of goods is the location treated as where goods are supplied. Under the IGST Act it is fixed by section 10 for domestic supplies and section 11 for imports and exports. Compare it with the supplier's location. Same State means CGST and SGST. Different States, import or export means IGST.

Understand Place of Supply of Goods

GST is a destination-based tax. So the law needs a rule to say where a supply is deemed to take place. That deemed location is the place of supply. It decides whether the supply is intra-State (CGST plus SGST/UTGST) or inter-State (IGST), and which State gets the revenue.

The test is simple. Take the location of the supplier. Find the place of supply. If both are in the same State or Union territory, the supply is intra-State. If they are in different States or Union territories, it is inter-State. An import of goods is treated as inter-State. So is an export.

For domestic goods, section 10 of the IGST Act gives a ladder of rules. Where goods move, the place of supply is where the movement ends. Where goods do not move, it is where the goods are at the time of delivery. Special rules cover goods that are assembled or installed at site, and goods supplied on board a conveyance such as a ship, aircraft, train or motor vehicle.

The bill to ship to rule applies when the buyer asks the supplier to deliver the goods to a third person. The goods go to the third person, but the place of supply is treated as the principal place of business of the buyer who gave the direction. The buyer is treated as having received the goods.

For imports, the place of supply is the location of the importer. For exports, it is a location outside India. If the place of supply cannot be worked out under section 10, it is determined in the manner prescribed.

Key rules to remember

Goods moved: Place of supply = location where movement of goods terminates for delivery to the recipient; IGST Act, section 10. This is the general rule for supplies involving movement, whether by the supplier, the recipient or any other person.
Bill to ship to: Delivery to a third person on the direction of the buyer → place of supply = principal place of business of the buyer who gave the direction; The buyer is deemed to have received the goods. The third person is ignored for this supply.
Goods not moved: Place of supply = location of the goods at the time of delivery to the recipient; Applies where there is no movement, for example goods lying in a warehouse and sold as they are.
Assembly or installation at site: Place of supply = place of installation or assembly; Applies when the goods are assembled or installed at the site.
Goods on board a conveyance: Place of supply = location at which the goods are taken on board; Conveyance means a vessel, aircraft, train or motor vehicle.
Imports and exports: Import: place of supply = location of the importer. Export: place of supply = location outside India; IGST Act, section 11. Both are inter-State supplies, so IGST applies.
Intra-State or inter-State: Supplier's location and place of supply in the same State/UT → CGST + SGST/UTGST. Different States/UTs → IGST; The supplier's location is the starting point. The place of supply is the second point of comparison.

How to solve Place of Supply of Goods questions

Use the same sequence for every question. Write the provision first, then apply it to the facts, then conclude on the tax.

1Identify the supplier's location and the recipient's location. Note the States for each.
2Check whether the supply is an import into India or an export out of India. If so, apply section 11.
3If it is a domestic supply, check whether the goods move. If they move, find where the movement ends.
4Check for special facts: delivery to a third person on the buyer's direction (bill to ship to), installation or assembly at site, or supply on board a conveyance.
5Apply the matching rule of section 10 and name the place of supply as a State or Union territory.
6Compare the supplier's location with the place of supply. Same State means CGST and SGST. Different States means IGST.
7Write a one-line conclusion naming the tax. If the facts are silent on location, state your assumption.

Quickest way: Three-question check

When to use it: Use this for short-answer or MCQ-style written questions where you have only a few minutes.

Question 1: Is it an import or export? If yes, the answer is IGST, and the place of supply is the importer's location or a location outside India.
Question 2: Did someone give a delivery direction to a third person? If yes, the place of supply is the directing buyer's location, not the delivery point.
Question 3: Otherwise, where do the goods end up or sit at delivery? That State is the place of supply. Compare it with the supplier's State.

Common mistakes in Place of Supply of Goods

Treating the third person's location as the place of supply in a bill to ship to case.
Students follow the physical movement of goods and forget the deeming rule.
Fix: Ask who directed the delivery. The place of supply for that supply is the directing buyer's principal place of business.
Using the recipient's billing address instead of where the movement ends.
The invoice address looks like the natural answer.
Fix: For moving goods, use where the movement terminates for delivery, unless a special rule applies.
Applying section 10 to imports and exports.
Students remember that section 10 is the place of supply of goods and stop there.
Fix: Remember the split: section 10 for domestic supplies, section 11 for imports and exports.
Charging CGST and SGST because the supplier and recipient are in the same State, even though the goods are delivered in another State.
Students compare the two parties' locations rather than the supplier and the place of supply.
Fix: Always compare the supplier's location with the place of supply, not with the recipient's location.
Ignoring the installation rule for machinery supplied and installed at the buyer's other site.
The movement rule is learned first and applied to everything.
Fix: Scan the facts for the words install, assemble or fit at site before applying the movement rule.
Giving a conclusion without naming the provision.
Students think the calculation matters more than the law.
Fix: Write the provision, then the facts, then the conclusion, in the ICSI answer style.

Worked examples

Example 1

Arvind Traders, Delhi, sells goods worth ₹5,00,000 to Bhatia Enterprises, Mumbai. On Bhatia's instructions, Arvind delivers the goods directly to Chopra Stores, Jaipur. Determine the place of supply for each supply and the tax that applies. Assume both Bhatia and Chopra are registered.

Show the solution

Provision: under section 10 of the IGST Act, where goods are delivered to a third person on the direction of the buyer, the buyer is deemed to have received the goods. The place of supply is the buyer's principal place of business.
Supply 1 (Arvind to Bhatia): the place of supply is Mumbai, Maharashtra. Arvind's location is Delhi. The two are different.
Supply 1 is therefore inter-State, so IGST applies.
Supply 2 (Bhatia to Chopra): the goods move and the movement ends in Jaipur, Rajasthan. Bhatia's location is Maharashtra.
Supply 2 is also inter-State, so IGST applies.

Answer: Supply 1 has Maharashtra as its place of supply, and supply 2 has Rajasthan as its place of supply. Both are inter-State, so IGST is chargeable on each. The goods physically move from Delhi to Jaipur, but that does not change the place of supply of supply 1.

Example 2

Southern Machines Ltd, Chennai, sells a machine for ₹10,00,000 to Kaveri Industries, which is located in Bengaluru. The machine is delivered to and installed at Kaveri's factory in Pune. Determine the place of supply and the tax payable. Assume an IGST rate of 18%.

Show the solution

Provision: under section 10 of the IGST Act, where goods are assembled or installed at site, the place of supply is the place of installation.
The machine is installed in Pune, so the place of supply is Maharashtra.
The supplier is located in Tamil Nadu. The supplier's location and the place of supply are in different States, so the supply is inter-State.
IGST applies. IGST = 18% × ₹10,00,000 = ₹1,80,000.
Kaveri's Bengaluru address does not affect the place of supply.

Answer: The place of supply is Maharashtra. The supply is inter-State, and IGST of ₹1,80,000 is payable.

Exam tips

Always write the section number: section 10 for domestic goods, section 11 for imports and exports. Do this only for sections you are sure of.
In long-answer questions, state the provision, apply the facts, then give a one-line conclusion on IGST or CGST and SGST.
Look for trigger words in the facts: on the direction of, installed at, on board, imported by. Each points to a specific rule.
Draw a small line diagram of supplier, buyer and third person. It makes the bill to ship to question easy to read and shows your reasoning.
If the facts do not give the supplier's State, state your assumption clearly rather than leaving the answer incomplete.

Practice questions from Time, Value and Place of Supply

Place of Supply of Goods 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: frequently asked questions

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

It is the location treated as where goods are supplied. It is fixed by section 10 for domestic supplies and section 11 for imports and exports. It decides whether the supply is intra-State or inter-State.

What is the bill to ship to model in GST?

It is where a buyer asks the supplier to deliver goods to a third person. The buyer is deemed to have received the goods, so the place of supply is the buyer's principal place of business. The third person's location does not decide the place of supply of that supply.

What is the place of supply for imports and exports of goods?

For an import, it is the location of the importer. For an export, it is a location outside India. Both are inter-State supplies, so IGST applies.

How does place of supply decide IGST or CGST and SGST?

Compare the supplier's location with the place of supply. If both are in the same State or Union territory, CGST and SGST apply. If they are in different ones, IGST applies.