What Is Place of Supply Under GST?

What is place of supply under GST?

Place of supply is the location where a supply is treated as having been made under GST, and it determines which tax applies: when the place of supply is in the same state as the supplier, CGST and SGST are charged, and when it is in a different state, IGST is charged instead. For goods it generally follows where the goods are delivered; for services the rules vary by type of service.

Goods

Generally the location where the movement of goods terminates for delivery to the recipient. Where there is no movement, it is the location of the goods at the time of delivery.

The bill-to ship-to case

Where goods are delivered to one party on the instruction of another, the supply is treated as made to the third party who gave the instruction, and the place of supply follows their location. This is the single most commonly mishandled scenario, and it is routine in Delhi NCR.

Services

The default is the location of the registered recipient, but there are many specific rules — immovable property, events, transport, telecoms — that override it. Applying the default to a service that has its own rule is a common error.

Why getting it wrong hurts

The total tax may be correct while the split is wrong, which means it went to the wrong government. Correcting that is not a simple adjustment: it usually means a refund claim on one side and a payment on the other.

Is place of supply the same as the customer’s billing address?

Not necessarily. For goods it generally follows delivery, and in a bill-to ship-to transaction it follows the party who gave the instruction rather than the party who received the goods.

What happens if I charge CGST and SGST when IGST applied?

The tax has gone to the wrong government. Correcting it typically means claiming a refund on one side and paying on the other, which is far more work than getting it right at the invoice.

Do services follow the same rules as goods?

No. Services have their own set of rules with a default of the recipient’s location and numerous specific overrides — immovable property, events, transport and others.