Place of Supply (all Sections 10 to 13 of the IGST Act)

Goods and Services Tax (GST) in India, the “Place of Supply” refers to the location where the supply of goods or services is deemed to occur, determining the applicable GST rate and jurisdiction for tax collection. This concept is crucial for determining whether the supply is intra-state (within the same state) or inter-state (between different states). For goods, it is usually the location where the goods are delivered. For services, it can be the location of the recipient or where the service is performed, depending on the nature of the service. Correctly identifying the place of supply ensures accurate tax compliance and proper allocation of tax revenues between states.

POS of Goods and Services:

The Place of Supply (POS) determines where the supply of goods or services is considered to occur, impacting the applicable GST rate and tax jurisdiction.

For Goods

1. Intra-State Supply: When goods are supplied within the same state, the POS is the location where the goods are delivered.
2. Inter-State Supply: When goods are supplied between different states, the POS is the location of the recipient, and the supply is subject to Integrated GST (IGST).

For Services

1. General Rule: The POS is the location of the recipient of the service.
2. Specific Cases:

Service where the place of performance is the location of the recipient:

If the service is performed at the recipient’s location (e.g., telecommunication services).

Service where the place of performance is the location of the supplier:

If the service is performed at the supplier’s location (e.g., consultancy services provided at the supplier’s office).

Place of Supply of Goods (Sections10 and 11):

Section 10 – Domestic Supplies of Goods (Within India)

This section applies when location of supplier and recipient are both in India.

• Where Goods Are Not Moved (Sec. 10(1)(a))

When the supply involves no movement of goods, the place of supply is the location of goods at the time of delivery.

Example: Selling a machine installed in a factory (goods remain fixed). POS = Factory location.

• Where Goods Are Moved (Sec. 10(1)(b))

If supply involves movement of goods, the POS is the location where the movement of goods terminates for delivery to the recipient.

Example: Supplier in Maharashtra sends goods to Karnataka. POS = Karnataka.

• Bill-to–Ship-to Transactions (Sec. 10(1)(b) Proviso)

Where goods are delivered to a third party on instructions of another person, the place of supply is the principal’s location (bill-to person), not where goods are physically delivered.

Example: A (Maharashtra) orders B (Delhi) to deliver goods to C (Punjab). POS = Maharashtra (bill-to).

• Where Goods Are Supplied on Board (Sec. 10(1)(c))

For goods supplied on board a conveyance (e.g., train, aircraft, vessel, or motor vehicle), the POS is the location where the goods are taken on board.

• Any Other Case (Sec. 10(1)(d))

If the above situations do not apply, the POS will be determined on a prescribed basis (rules framed by the government).

Section 11 – International Supplies of Goods (Imports and Exports):

This section applies when location of supplier or recipient is outside India.

1. Imports of Goods

The POS for imports is always the location of the importer (i.e., the place where goods are finally imported).

2. Exports of Goods

The POS for exports is the location outside India where the goods are delivered.

Key Point:

• Imports: IGST is payable at the point of customs clearance.

• Exports: Treated as zero-rated supplies (POS outside India).

3. Place of Supply of Services (Sections 12 and 13)

Services are more complex than goods because there is no physical movement. The POS depends on whether both supplier and recipient are in India (Sec. 12) or one of them is outside India (Sec. 13).

Section 12 – Place of Supply of Services (DOMESTIC)

This section applies when location of supplier and recipient is in India.
General Rule (Sec. 12(2)):

• Registered recipient: POS = Location of such recipient.

• Unregistered recipient: POS = Address on record; if not available, POS = Location of supplier.

Special cases under Section 12:

1. Services Relating to Immovable Property (Sec. 12(3))

For services directly related to immovable property (construction, architect, hotel accommodation, renting, etc.):

POS = Location of the property.

If property is located outside India, POS = Recipient’s location.

2. Restaurant, Catering, Personal Grooming, Fitness, and Salon Services (Sec. 12(4))

For these personal performance-based services:

POS = Place where services are actually performed.

3. Training and Performance Appraisal (Sec. 12(5))

If supplied to registered person: POS = Location of such registered person.

If supplied to unregistered person: POS = Location where services are performed.

4. Admission to Events (Sec. 12(6))

POS = Place where the event is actually held (sports, cultural, educational events, amusement parks).

5. Organisation of Events (Sec. 12(7))

• Registered recipient: POS = Recipient’s location.

• Unregistered recipient: POS = Place where the event is held.

• If event is outside India: POS = Recipient’s location.

6. Transportation of Goods (Sec. 12(8))

• Registered person: POS = Location of recipient.

• Unregistered person: POS = Location where goods are handed over for transportation.

7. Passenger Transportation (Sec. 12(9))

• Registered person: POS = Recipient’s location.

• Unregistered person: POS = Place where passenger embarks on the journey (if no address available).

8. Services on Board a Conveyance (Sec. 12(10))

• POS = First scheduled point of departure of the conveyance.

9. Telecommunication Services (Sec. 12(11))

Different rules apply:

• Fixed line/leased circuits: POS = Location of the line.

• Prepaid mobile/DTH: POS = Location where payment is received/recharged.

• Postpaid mobile: POS = Billing address.

10. Banking and Financial Services (Sec. 12(12))

• POS = Location of the recipient as per records. If not available, POS = Location of the supplier.

11. Insurance Services (Sec. 12(13))

• Registered person: POS = Recipient’s location.

• Unregistered person: POS = Location of the recipient as per insurer’s records.

12. Advertisement Services to Government (Sec. 12(14))

• POS = Each State/Union Territory where the advertisement is displayed, proportionately.

Section 13 – Place of Supply of Services (International)

This section applies when location of either the supplier or recipient is outside India.

General Rule (Sec. 13(2))

• POS = Location of the recipient.

• If recipient’s location is not available: POS = Location of the supplier.

Special cases under Section 13:

1. Services Related to Immovable Property (Sec. 13(4))

• POS = Location of the property. If property is outside India, POS = Outside India.

2. Performance-based Services (Sec. 13(3))

For services like personal grooming, training, or cultural/arts/sports performed physically:

• POS = Location where services are actually performed.

3. Services of Admission to Events (Sec. 13(5))

• POS = Location where the event is held.

4. Services Supplied on Board a Conveyance (Sec. 13(6))

• POS = First scheduled point of departure of the conveyance.

5. Specified Services (Sec. 13(8))

For intermediary services, hiring of transport (except aircraft/vessels) up to one month, and short-term electronic services, the POS = Supplier’s location (even if recipient is outside India).

6. Online Information and Database Access or Retrieval (OIDAR) Services (Sec. 13(12))

• POS = Location of the recipient.
  Special rules ensure tax on cross-border digital services.

Importance of Place of Supply:

• Determines Tax Type (IGST vs CGST/SGST)

Correct identification of POS ensures appropriate tax is charged.

• Avoids Double Taxation or Non-Taxation

Rules create certainty and avoid overlapping jurisdiction issues.

• Essential for Exports/Imports

For zero-rated exports and IGST on imports, POS is critical.

• Key for Compliance and Returns

Incorrect POS can lead to wrong classification of supply, penalties, and disputes.