Place of Supply
AI-assisted · review in progress · last updated 25 July 2026 · jump to quick revision
In 30 seconds
- GST is a destination-based tax — place of supply (PoS) read with location of supplier (LOS) decides inter-State (IGST) vs intra-State (CGST + SGST/UTGST).
- Intermediate scope is Section 10 (goods) and Section 12 (services) of the IGST Act, domestic supplies only — Sections 11 and 13 (cross-border) are Final-level.
- Goods mnemonic MTNAI: Movement (a), Third person/bill-to-ship-to (b), No movement (c), Address of unregistered recipient (ca), Install/on-board (d)/(e).
- Services: always check the specific rules in 12(3)–(14) first; the general rule 12(2) is residual — B2B → LOR, B2C → LOR if address on record, else LOS.
- Section 9 territorial-waters deeming applies before the Section 7/8 classification; wrong classification means paying the correct tax and refund-claiming the wrong one — no interest.
Based on GST law as on 30.04.2025 (May 2026 exams onwards). Place of supply lives in Chapter V of the IGST Act — section numbers are IGST Act unless stated.
How the chapter fits together
GST is a destination-based tax: it should land where the goods or services are consumed. Place of supply (PoS), read with the location of the supplier (LOS), decides whether a supply is inter-State (IGST) or intra-State (CGST + SGST/UTGST). Section 2(86) of the CGST Act simply points to Chapter V of the IGST Act (Sections 10–14). Intermediate scope: Section 10 (goods) and Section 12 (services), domestic only — Section 11 (import/export of goods) and Section 13 (cross-border services) are Final-level.
- Sec 9 first — territorial-waters deeming (“notwithstanding anything in the Act”) →
- Sec 10 / Sec 12 fix the place of supply →
- Sec 7 / Sec 8 classify: LOS & PoS in different States/UTs → inter-State (IGST); same State/UT → intra-State (CGST + SGST/UTGST).
Two mnemonics carry the whole chapter:
- Goods — “MTNAI” (Sec 10): Movement (a) → Third person/bill-to-ship-to (b) → No movement (c) → Address of unregistered recipient (ca) → Install (d) / on board (e).
- Services — “GRAPES-TIC” (Sec 12): General (2), immovable pRoperty (3), restAurant/grooming (4), Performance/training (5), Event admission (6), organiSation of event (7), Transport of goods (8), passenger transport (9), on-board conveyance (10), telecom (11) — then mentally run the sub-sections in order 2-3-4-5-6-7-8-9-10-11-12-13-14.
Why services need proxies: goods are tangible and easily located, but services are not, so PoS is fixed through proxies — (a) LOS, (b) LOR, (c) place of performance, (d) place of consumption, (e) the place where the benefit flows. The design logic: B2B → LOR (the tax just passes through as ITC), B2C → the actual consumption point (the tax truly lands there).
Two comforting facts: this chapter has no compliance deadlines (the only number worth memorising is 12 nautical miles) and no specific penalties — a wrong PoS classification means the correct tax is still payable plus a refund claim for the wrongly paid tax, with no interest, only procedural and working-capital pain.
Definitions that drive everything
Location of recipient of services [Sec 2(14) IGST]
A 4-limb cascade: (a) registered place of business → (b) fixed establishment elsewhere → (c) establishment most directly concerned → (d) usual place of residence. Applies to services only — no such definition exists for goods. Sec 2(15) is the mirror cascade for the supplier, keyed to “provision” of the service.
Fixed establishment [Sec 2(7) IGST]
A place other than the registered place of business, with sufficient permanence plus human AND technical resources, used to supply or to receive/use services. An employee alone is not a fixed establishment without technical resources.
Continuous journey [Sec 2(3) IGST]
Single or simultaneously issued tickets, from a single supplier or an agent acting for multiple suppliers, with no stopover (= disembarking to transfer or break the journey). A return journey is always a separate journey, even if booked together.
Recipient [Sec 2(93) CGST]
Consideration payable → the payer; no consideration: goods → to whom delivered, services → to whom rendered; includes an agent. Bill-to-ship-to trap: the person physically collecting the goods is not the “recipient” for Sec 10(1)(b) — the third person is the deemed recipient.
The remaining definitions, table form:
| Term | Crisp meaning | Trap / keyword |
|---|---|---|
| Conveyance [2(34) CGST] | Vessel, aircraft, vehicle | Sec 10(1)(e)/12(10) explicitly add “train/motor vehicle” |
| Place of business [2(85) CGST] | Inclusive: where business is ordinarily carried on / warehouse / godown; where books of account are kept; through an agent | Applies to both goods & services (unlike 2(14)/2(15)) |
| Supplier [2(105) CGST] | Person supplying + agent; deemed supplier = platform owner/operator/manager of specified actionable claims (online money gaming), even if consideration passes “through” | Deeming targets digital gaming platforms |
| Supply [2(21) IGST] | Meaning per Sec 7 of the CGST Act | Cross-reference only |
| Sec 2(24) IGST | Undefined words take their CGST/UTGST/Compensation Act meaning | Residuary cross-reference rule |
| Intra-State supply | LOS & PoS in the same State/UT | CGST + SGST/UTGST |
| Inter-State supply | LOS & PoS in different States/UTs/State–UT | IGST |
| Distinct persons [Expl. 1, Sec 8] | Establishments of the same entity: (i) in a State/UT plus another outside it; (ii) in a State/UT plus another registered within that same State/UT | Treated as separate persons |
| Establishment [Expl. 2, Sec 8] | Includes branch, agency, representational office | — |
| Territorial waters | Belt up to 12 nautical miles from the baseline (UNCLOS; Sec 3(2), Maritime Zones Act 1976) | Not defined under GST law |
| SEZ | Treated as a place outside India; supplies to/by an SEZ developer/unit are zero-rated | Knowledge-only exception to Sec 8 |
Place of supply of goods — Section 10
| Clause | Situation | Place of supply | Trap / keyword |
|---|---|---|---|
| 10(1)(a) | Movement of goods involved | Where the movement terminates for delivery | Not linked to transfer of title |
| 10(1)(b) | Bill-to-ship-to (third person directs delivery) | Leg 1: principal place of business of the third person | Deemed receipt by the third person |
| 10(1)(c) | No movement | Location of the goods at the time of delivery | Static — contrast with (a) |
| 10(1)(ca) | Unregistered recipient | Address on the invoice; no address → LOS | “Notwithstanding” — overrides (a) & (c); recording only the State name suffices |
| 10(1)(d) | Installation / assembly at site | Place of installation/assembly | Composite supply with goods as principal |
| 10(1)(e) | Goods on board a conveyance | Location where the goods are taken on board | Even if sold by a passenger |
| 10(2) | Residual | Manner to be prescribed | Not yet prescribed |
Bill-to-ship-to is really two deemed supplies:
- Supply 1 (Supplier → Third person): PoS = the third person’s principal place of business — Sec 10(1)(b).
- Supply 2 (Third person → Recipient): PoS = where the movement of goods terminates for delivery — Sec 10(1)(a).
Circular 209/3/2024 applies 10(1)(ca) to e-commerce: for an unregistered buyer whose billing address differs from the delivery address, PoS = the delivery address recorded on the invoice.
Place of supply of services — Section 12
Scope first — Sec 12(1): Section 12 applies only when both LOS and LOR are in India; if either is outside India, it is Section 13 territory (Final, not examinable).
General rule — Sec 12(2), residual only: B2B → LOR (the GSTIN is available); B2C → LOR if the address is on record, else LOS. It applies only when none of 12(3)–(14) covers the service — always check the specific list first.
| Sub-sec | Service | Place of supply | Provisos / traps |
|---|---|---|---|
| 12(3) | Immovable property & lodging: architects, interior decorators, surveyors, engineers, estate agents; hotel/inn/guest house/home stay/club/campsite/houseboat; marriage/function accommodation | Location of the property/boat/vessel — even if only “intended to be located” (under construction) | Property outside India → LOR; multi-State → apportion per contract, absent contract → Rule 4 IGST Rules (nights stayed = hotel; area = other property, incl. one property spanning contiguous States; time spent = houseboat) |
| 12(4) | Restaurant & catering, personal grooming, fitness, beauty treatment, health services | Place actually performed | Includes cosmetic/plastic surgery |
| 12(5) | Training & performance appraisal | B2B: LOR; B2C: place performed | — |
| 12(6) | Admission to an event / amusement park | Place the event is held / park is located | No B2B/B2C distinction |
| 12(7) | Organisation of events + sponsorship | B2B: LOR; B2C: place the event is held | B2C event outside India → LOR; multi-State event → apportion only if the recipient is unregistered, absent contract → Rule 5 (GAAP) |
| 12(8) | Transport of goods incl. mail/courier | B2B: LOR; B2C: place the goods are handed over for transport | Applies even if the destination is outside India, so long as both parties are in India |
| 12(9) | Passenger transport | B2B: LOR; B2C: embarkation point for a continuous journey | Return journey = separate journey; future-use right with embarkation unknown at issue → fall back to 12(2) |
| 12(10) | Services on board a conveyance | First scheduled point of departure | Not where boarded; no B2B/B2C distinction |
| 12(11) | Telecom | Varies by mode — see the ladder below | Address unavailable → LOS; e-recharge → LOR |
| 12(12) | Banking, financial, stock broking | LOR on the supplier’s records | Not on record → LOS (the classic walk-in bank customer) |
| 12(13) | Insurance | B2B: LOR; B2C: LOR on the supplier’s records | — |
| 12(14) | Advertisement to Government | Each State/UT covered by the contract, value apportioned | Absent contract → Rule 3 IGST Rules (apportionment detail non-examinable) |
The telecom ladder under 12(11):
- Fixed line / leased circuit / dish antenna → installation location.
- Post-paid → billing address on record; else LOS.
- Pre-paid via agent/reseller/distributor → that agent’s address on record.
- Pre-paid direct to subscriber → location where payment is received / voucher is sold.
- Pre-paid via e-payment/internet banking → LOR on record (Proviso 2).
- Other cases → address on record, else LOS.
- Leased circuit in more than one State → apportion per contract; absent contract → Rule 6 (number of points; start + end = 2 points; an intermediate point counts only if benefit is available there).
Two more circulars complete Section 12:
- Circular 242/36/2024: online/digital/OIDAR/online money gaming services to unregistered persons — the State name on the invoice is mandatory and is the deemed address on record, so PoS = LOR under 12(2)(b).
- Circular 203/15/2023 (hoardings): sale/grant of the right to use the structure = 12(3)(a), property location; but if the vendor retains possession and displays the ad, it is a pure advertisement service under the 12(2) general rule, not 12(3).
Inter-State or intra-State — Sections 7, 8 and 9
| Provision | Test | Result / trap |
|---|---|---|
| Sec 7(1)/(3) | LOS & PoS in two different States / UTs / a State–UT combination | Inter-State → IGST (subject to Sec 10/12) |
| Sec 7(5)(c) | Supply in the taxable territory, not intra-State, not covered elsewhere | Residuary inter-State catch-all |
| Sec 8(1)/(2) | LOS & PoS in the same State/UT | Intra-State → CGST + SGST/UTGST |
| Sec 8 provisos (knowledge-only) | Supplies to/by SEZ developer/unit; goods supplied to a tourist (Sec 15 IGST); imported goods | Never intra-State, even when LOS = PoS State |
| Sec 9 | LOS or PoS in territorial waters | Deemed to be the nearest coastal State/UT (from the baseline); “notwithstanding anything in the Act” — applied before the Sec 7/8 test |
Watch for “notwithstanding” clauses — they signal overriding provisions: 10(1)(ca) over 10(1)(a)/(c), and Sec 9 over the whole Act.
- Mixing up 10(1)(a) and 10(1)(c): with movement, PoS = the termination point of movement; without movement, PoS = the goods’ location at the time of delivery (static).
- Treating admission [12(6)] like organisation [12(7)]: admission is always the place the event is held (no B2B/B2C split); organisation splits — B2B → LOR, B2C → place held.
- Confusing goods on board [10(1)(e)] with services on board [12(10)]: goods → location taken on board; services → first scheduled point of departure.
- Sending a 12(3)-proviso case to Section 13: if LOS and LOR are both in India and only the property is abroad, PoS = LOR under 12(3) — Section 13 needs a party outside India (Final, not this chapter).
- Reaching for the 12(2) general rule before checking 12(3)–(14) — 12(2) applies only when no specific sub-section covers the service.
- Assuming B2C default PoS is always LOR — it is LOR only if the address is on record, else LOS.
- Applying the Sec 2(14) four-limb cascade to goods — location of recipient of goods is not defined in the Act; 2(14)/2(15) are services-only.
- Treating a return journey as part of one continuous journey — it is always a separate journey with its own PoS, even if booked together.
Quick revision cards
Goods mnemonic for Sec 10?
General rule 12(2)?
Bill-to-ship-to — two supplies?
10(1)(ca) unregistered recipient?
Admission vs organisation of an event?
Goods on board vs services on board?
Passenger transport B2C?
Telecom pre-paid via internet banking/e-mode?
Walk-in bank customer, no address on record?
Sec 9 territorial waters?
Immovable property in more than one State?
Wrong PoS classification — consequence?