Place of Supply of Goods in GST: GST is a destination based tax, i.e., the goods/services will be taxed at the place where they are consumed and not at the origin. So, the state where they are consumed will have the right to collect GST. While determining the levy of taxes based on Place of Supply, two things are considered namely:
- Location of Supplier: It is the registered place of business of the supplier.
- Place of Supply: It is the registered place of business of the recipient.
This, in turn, makes the concept of place of supply crucial under GST as all the provisions of GST revolves around it.
Place of Supply of Goods
As per section 10 of the CGST Act, 2017 Place of Supply of goods other than supply of goods imported into, or exported from India, shall be as under:
Place of supply of goods under GST defines whether the transaction will be counted as intra-state or inter-state, and accordingly levy of SGST, CGST & IGST will be determined.
Example: Mr. C of Chennai received purchase order from Mr. H of Hyderabad for want of commercial goods. Now supply involves movement of goods by supplier from Chennai to Hyderabad in a truck by road.
- Place of supply of goods = Hyderabad.
- IGST will be levied.
Declared outward supply of goods in Table 5 of GSTR – 1, supplier should indicate place of supply where location of supplier and recipient are different.
The supplier delivers goods to a recipient or any other person on the direction of a third person by way of transfer of documents of title to the goods or otherwise [Section 10(1)(b) of the IGST Act 2017]:
| Nature of supply | Place of supply of goods |
| Goods are delivered by the supplier to a recipient or any other person on the direction of a third person, whether acting as an agent or otherwise, before or during movement of goods by way of transfer of documents of title to the goods or otherwise. | It shall be deemed that the said third person has received the goods and the Place of Supply of such goods shall be the principal place of business of such person. |
Browse by topics:
- Movement of goods
- No movement of goods
- Goods supplied on a vessel/conveyance
- Imports & exports
Example 1- Intra-state sales
Mr. Raj of Mumbai, Maharashtra sells 10 TV sets to Mr. Vijay of Nagpur, Maharashtra
The place of supply is Nagpur in Maharashtra. Since it is the same state CGST & SGST will be charged.
Example 2-Inter-State sales
Mr. Raj of Mumbai, Maharashtra sells 30 TV sets to Mr. Vinod of Bangalore, Karnataka
The place of supply is Bangalore in Karnataka. Since it is a different state IGST will be charged.
Example 3- Deliver to a 3rd party as per instructions
Anand in Lucknow buys goods from Mr. Raj in Mumbai (Maharashtra). The buyer requests the seller to send the goods to Nagpur (Maharashtra)
In this case, it will be assumed that the buyer in Lucknow has received the goods & IGST will be charged.
Place of supply: Lucknow (UP)
GST: IGST
Example 4- Receiver takes the goods ex-factory
Mr. Raj of Mumbai, Maharashtra gets an order of 100 TV sets from Sales Heaven Ltd. of Chennai, Tamil Nadu. Sales Heaven mentions that it will arrange its own transportation and take TV sets from Mr. Raj ex-factory
Place of supply: Maharashtra
GST: CGST & SGST
As, the goods are received ex-factory, i.e., in Maharashtra, the movement of the goods terminates for delivery to the recipient there. It is immaterial whether the receiver further transports the goods or not.
Example 5 – E-commerce sale
Mr. Raj of Mumbai, Maharashtra orders a mobile from Amazon to be delivered to his mother in Lucknow (UP) as a gift. M/s ABC (online seller registered in Gujarat) processes the order and sends the mobile accordingly and Mr. Raj is billed by Amazon.
Similar to example 3, it will be assumed that the buyer in Mumbai has received the goods & IGST will be charged.
Place of supply: Mumbai, Maharashtra
GST: IGST
No Movement of Goods
| Supply is: | Place of supply |
| No movement of goods, either by the supplier or the recipient | Location of such goods at the time of the delivery to the recipient (at the time of transfer of ownership) |
| The goods are assembled or installed at site | Place of such installation or assembly |
Example 1- No movement of goods
Sales Heaven Ltd. (Chennai) opens a new showroom in Bangalore. It purchases a building for showroom from ABC Realtors (Bangalore) along with pre-installed workstations
Place of supply: Bangalore
GST: CGST& SGST
There is no movement of goods (work stations), so the place of supply will be the location of such goods at the time of delivery (handing over) to the receiver.
Note: There is no GST on purchase of building or part thereof. RENT of commercial space attracts GST
Example 2- Installing goods
Strong Iron & Steel Ltd. (Jharkhand) asks M/s SAAS Constructions (West Bengal) to build a blast furnace in their Jharkhand steel plant
Place of supply: Jharkhand
GST: CGST & SGST
Although M/s SAAS is in West Bengal, the goods (blast furnace) is being installed at site in Jharkhand which will be the place of supply.
Note: M/s SAAS will have to be registered in Jharkhand to take up this contract. They can opt to register as a casual taxable person which will be valid for 90 days (extendable by 90 days more, on basis of a reasonable cause).
Goods Supplied on a Vessel / Conveyance
| Supply is | Place of supply |
| Goods are supplied on board a conveyance, including a vessel, an aircraft, a train or a motor vehicle | Location at which such goods are taken on board. |
Example 1- Plane
Mr. Ajay is travelling from Mumbai to Delhi by air. He purchases coffee and snacks while on the plane. The airlines is registered in both Mumbai and Delhi.
Place of supply: Mumbai
GST: CGST& SGST
The food items were loaded into the plane at Mumbai. So, place of supply becomes Mumbai.
Example 2- Plane- Business travel
Mr. Ajay is travelling from Mumbai to Chennai by air on behalf of his company Ram Gopal and Sons (registered in Bangalore). In the plane he purchases lunch. The airlines is registered in Mumbai & Chennai.
Place of supply: Mumbai
GST: CGST & SGST
The food items were loaded into the plane at Mumbai. So, place of supply becomes Mumbai. It does not matter where the buyer is registered.
Example 3- Train
Mr. Vinod is travelling to Mumbai via train. The train starts at Delhi and stops at certain stations before Mumbai. Vinod boards the train at Vadodara (Gujarat) and promptly purchases lunch on board. The lunch had been boarded in Delhi.
Place of supply: Delhi
GST: CGST & UTGST
The food items were loaded into the train at Delhi. So, place of supply becomes Delhi.
Place of supply of goods cannot be determined
in such case, the place of supply will be determined by Parliament rules on the basis of GST Council recommendations…
Imports & Exports
The place of supply of goods:
- imported into India will be the location of the importer.
- exported from India shall be the location outside India.
| Supply is | Place of supply | GST |
| Goods imported into India | Location of the importer | Always IGST on Imports |
| Exported from India | Location outside India | Exports are exempted |
Example 1 Import
Ms. Malini imports school bags from China for her shop (registered in Mumbai)
Place of supply: Mumbai
GST: IGST
Example 2 Export
Ms. Anita (Kolkata) exports Indian perfumes to UK
Place of supply: Kolkata
GST: Exempted
How our software can help you?
Based on your buyer’s and your GSTIN the software will automatically calculate the place of supply according to the provisions and inform you whether you will charge CGST/SGST or IGST.
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