Place of supply, and why it decides your tax
Not where you are and not where you ship from — where the supply is treated as happening.
Last checked 20 September 2026
Place of supply is where a supply is treated as happening for GST. It is not necessarily where you are or where you dispatched from, and it is what decides whether you charge CGST plus SGST or IGST. Get it wrong and your buyer cannot use the credit.
Goods
For goods the general rules are straightforward:
| Situation | Place of supply |
|---|---|
| Goods are moved, by anyone | Where the movement ends for delivery to the buyer |
| Goods are handed over on the spot, no movement | Where the goods are at the time of delivery |
| Goods delivered to a third party on the buyer’s instruction | The buyer’s principal place of business — not where the goods physically went |
| Imports | The importer’s location |
| Exports | Outside India |
The third row catches people out. If a Delhi buyer tells you to ship to their branch in Jaipur, the place of supply is Delhi, because that is the buyer’s principal place of business — this is the "bill to, ship to" case.
Services
For services the default is simple, and then there is a long list of exceptions.
- Registered buyer: the buyer’s location.
- Unregistered buyer: the buyer’s address if you hold it, otherwise the supplier’s location.
Specific rules override that default for, among others, services connected with immovable property (where the property is), restaurant and personal grooming services (where performed), admission to events (where the event is), and passenger and goods transport.
Why it is worth care
The place of supply determines the tax charged. Charge CGST + SGST where IGST was due and you have paid the wrong governments; your buyer has credit sitting in a pot they cannot use for that supply, and fixing it means amending a reported invoice. The error is cheap to prevent and expensive to unwind.
Where errors actually come from
Almost never from misreading the law — almost always from a party record with a missing or wrong state. Make the state a required field when a party is created and most of this problem disappears. See add a party.
What must be printed
On an inter-state supply the invoice must carry the place of supply along with the name of the state. Where the delivery address differs from the place of supply, that has to be shown too. Both are required particulars — see GST invoice format.
My customer has GSTINs in three states. Which do I use?
The one for the registration actually receiving the supply. Ask which GSTIN to bill, and record the matching state — do not guess from the delivery address.
Goods go to a state where the buyer is not registered. What then?
For a registered buyer directing delivery elsewhere, the bill-to/ship-to rule generally puts the place of supply at their principal place of business. Confirm the facts of your case.
Does place of supply matter for exempt goods?
There is no tax to split, but it still determines the nature of the supply and how it is reported.
Sources
- IGST Act 2017, sections 10 to 13
- CBIC — GST Acts, Rules and notifications (cbic-gst.gov.in)
Related reading
CGST, SGST and IGST: which one do I charge?
Inside your state the tax splits in two. Across a state border it stays whole.
What is GST?
One tax on the supply of goods and services, charged at every stage but paid only on the value added.
GST invoice format: what must be on the bill
The fields Rule 46 requires, with a worked example of each.