Place of Supply (PoS) determines whether GST is inter-state (IGST) or intra-state (CGST+SGST). Getting PoS wrong means wrong tax type, mandatory reversal, interest, and potential penalties. This guide covers every PoS rule for goods and services with practical examples.
PoS: Location where movement terminates (delivery)
Example: Seller in Delhi ships goods to warehouse in Mumbai → Place of supply = Maharashtra → IGST
PoS: Principal place of business of the third party
Example: A (Delhi) directs B (Hyderabad) to deliver to C (Chennai) → PoS = Telangana (B's location)
PoS: Location of goods at time of delivery
Example: Ex-works sale: Buyer picks up goods from seller's factory in Gujarat → PoS = Gujarat
PoS: Place of installation or assembly
Example: Factory machinery assembled at client site in Kolkata → PoS = West Bengal
PoS: Location at which goods are taken on board
Example: Food supplied on a train departing from Jaipur → PoS = Rajasthan
PoS: Location of the immovable property
Example: Architecture services for a building in Pune → PoS = Maharashtra, regardless of architect's location
PoS: Location where services performed
Example: Catering for an event in Bangalore → PoS = Karnataka
PoS: Location where services performed (if to registered person: recipient's location)
Example: Training workshop in Chennai for registered company → PoS = Registered person's location
PoS: If registered person: recipient's location. Else: where goods handed over
Example: Courier from Mumbai to Delhi for unregistered person → PoS = Maharashtra (handover point)
PoS: Place where passenger embarks
Example: Flight from Hyderabad to Delhi → PoS = Telangana (embarkation point)
PoS: Location of recipient on records. If not available: supplier's location
Example: Bank account in SBI Mumbai branch for Delhi customer → PoS = Delhi (recipient's location)
PoS: If registered: recipient's location. Else: location of recipient on records
Example: LIC policy for customer in Jaipur → PoS = Rajasthan
PoS: If postpaid: billing address. If prepaid: address of selling agent. If online: recipient's address
Example: Prepaid recharge bought from shop in Lucknow → PoS = Uttar Pradesh
PoS: Location of the recipient of services
Example: IT consulting by Pune firm to registered company in Delhi → PoS = Delhi
PoS: Location of the recipient if available, else supplier's location
Example: Website design for unregistered individual (address unknown) → PoS = supplier's location
Place of Supply determines whether a transaction is inter-state (IGST) or intra-state (CGST+SGST). If the place of supply is in a different state than the supplier's location, IGST applies. If both are in the same state, CGST+SGST applies. Wrong determination leads to wrong tax type, requiring reversal and re-payment — plus potential interest and penalties.
For Online Information and Database Access or Retrieval (OIDAR) services to non-taxable recipients in India from suppliers outside India, the place of supply is the location of the recipient. The foreign supplier must register under a simplified scheme (Section 14 of IGST Act) and pay IGST. Examples: Netflix, Spotify, cloud SaaS subscriptions to Indian individuals.
Under Section 10(1)(b) of IGST Act, when goods are delivered to a third party on the direction of a third person, the place of supply is the principal place of business of the 'third person' (the one who directs delivery). For example, if Company A (Delhi) asks Supplier B (Mumbai) to deliver goods to Company C (Chennai), the PoS is Delhi (A's location).
If the place of supply cannot be determined under the specific provisions of Sections 10-14, the default rules apply: for B2B transactions, PoS is the recipient's location; for B2C, PoS is the supplier's location. Additionally, the government can prescribe rules for specific scenarios through notifications.
For export of goods (Section 11), the place of supply is the location outside India (destination country). For export of services (Section 13), the PoS is the location of the recipient of services outside India. Both are zero-rated supplies under Section 16, meaning no tax is charged (or refund is available).
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