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What is Place of Supply?

Last updated: 27 June 2026

Place of Supply (PoS) is the location — determined under Sections 10–13 of the IGST Act — that decides whether a GST transaction is intra-state (attracting CGST + SGST) or inter-state (attracting IGST), and which state government receives the tax revenue.

Getting the Place of Supply wrong means the wrong type of GST is charged, potentially leading to ITC mismatches, penalties, and interest — even if the total tax amount is the same.

Why Place of Supply matters

India's GST is a destination-based tax: revenue goes to the state where consumption happens. If a supplier in Maharashtra invoices a buyer in Karnataka, the place of supply is Karnataka, IGST applies (collected by the Centre and transferred to Karnataka). If both are in Maharashtra, CGST + SGST applies and Maharashtra keeps the SGST.

Fact box. If you charge CGST/SGST on what should be an IGST transaction (or vice versa), your buyer cannot claim the ITC — even though tax was paid. You must issue a credit note and a corrected invoice to fix the error.

Rules for goods (Section 10)

For physical goods, the place of supply is generally the location where goods are delivered. For goods installed or assembled at the buyer's site, it is the site of installation.

Rules for services (Sections 12 & 13)

Services are more complex. The default rule: the place of supply is the location of the recipient (if registered). Key specific rules include:

  • Immovable property services (construction, architects, interior designers): location of the property
  • Restaurant / catering services: location where the service is performed
  • Transport of goods: location of the registered recipient (B2B)
  • Cross-border services to unregistered persons: location of the supplier

Frequently asked questions

What if the Place of Supply is outside India? Exports are zero-rated. The supply is still taxable under GST but at 0%, and the exporter can claim a refund of ITC or pay IGST and claim it back.

Who decides the Place of Supply — supplier or buyer? The law determines it — neither party chooses. The supplier is responsible for correctly identifying PoS and charging the right type of GST on the invoice.

Sources: CBIC — cbic.gov.in; IGST Act, 2017 (Sections 10–13)

General information, not professional advice. Verify on the official portal for your case. Reviewed by a Chartered Accountant; last updated 27 June 2026.

Related: GSTIN · Input Tax Credit (ITC) · E-Invoice (IRN)