Place of supply under GST: meaning and basic rules
Place of supply decides whether a transaction is intra-state (CGST plus SGST) or inter-state (IGST). The rules are in sections 10 to 13 of the IGST Act.
Short answer
Place of supply is the location where a supply of goods or services is treated as made for GST purposes. Comparing it with the supplier's location decides whether the supply is intra-state, attracting CGST and SGST, or inter-state, attracting IGST. The rules are set out in sections 10 to 13 of the IGST Act, 2017.
- Governed by
- Sections 10 to 13, IGST Act 2017
- Same state
- CGST plus SGST
- Different state
- IGST
- Wrong tax paid
- Pay correct tax and claim refund
Basic rules
The rules differ for goods and services and for domestic and cross-border supplies. The most common default rules are summarised below, but specific services have their own rules, so always check the relevant section.
- Goods with movement: where the movement ends for delivery to the recipient
- Goods without movement: location of the goods at the time of delivery
- Services to a registered person: the recipient's location
- Services to an unregistered person: the recipient's address on record, otherwise the supplier's location
- Services related to immovable property: where the property is located
- Supplies involving a party outside India: section 13 rules, often the recipient's location
Example
A Bengaluru software company sells a subscription to a registered business in Pune. The supplier is in Karnataka and the place of supply is Maharashtra, where the recipient is registered, so the supply is inter-state and IGST applies. If the same company sells to a registered business in Mysuru, the supply is intra-state and attracts CGST and SGST. Exports of services, where the place of supply is outside India and other conditions are met, are zero-rated.
Why it matters for startups
Charging the wrong type of tax is a common error. If you charge CGST and SGST on what is actually an inter-state supply, you must pay IGST and claim a refund of the wrongly paid tax, which ties up cash. Capture customers' GSTIN and state at onboarding, and configure your billing system to apply place of supply rules automatically.
Related services
Sources
Written by the Refogo Editorial Team from the official sources above and checked on 2026-10-31. Laws, rates and due dates change, and authorities often extend deadlines, so confirm your own case with a qualified professional. This is general information, not legal or tax advice. Read our editorial policy or report an error to support@refogo.com.
Common questions
What happens if I charge IGST instead of CGST and SGST?
You must pay the correct tax and can claim a refund of the tax wrongly paid under section 77 of the CGST Act and section 19 of the IGST Act.
Is place of supply the same as billing address?
Not always. For many services to registered persons it is the recipient's registered location, but special rules apply to events, transport, property and some other services.
How is place of supply decided for exports of services?
Section 13 of the IGST Act applies, and for most services it is the recipient's location outside India.