Place of Supply for Goods

Place of supply concept under GST plays an important role in determining the applicability of IGST or CGST & SGST. Also, in the GST invoice and GST return filing, place of supply must be mentioned mandatorily. Hence, we look at the GST place of supply concept in detail in this article.

Inter-State vs Intra-State Supply

Place of supply dictates the type of supply, which determines the applicability of GST as under:

Intra-State Supply

Intra-state supply is the supply of goods or services within the same state or union territory. Hence, a supply of service by a Chartered Accountant firm in Tamil Nadu to a client in Tamil Nadu would be termed as intra-state supply. Intra-state supply attract CGST and SGST.

Inter-State Supply

Inter-state supply attracts IGST. Various types of transactions as under can be classified as inter-state supply:

1. Supply of goods or services from one State or Union Territory to another State or Union Territory.
2. Import of goods or services.
3. Export of goods or services.
4. Supply of goods or services to or by SEZ.
5. Supplies to international tourists.
6. Any other supply which cannot be treated as intra-state supply.

Place of Supply for Goods

Place of supply for goods is determined as follows:

1. For the supply of goods that involve transportation, place of supply would be the location of the delivery of goods to the recipient.
2. In case goods are delivered to the recipient on the direction of a third person, then the principal place of business of the third person would be the place of supply.
   1. For example, if a designer orders 100 meters of fabric to be delivered to a Tailor for stitching, the principal place of business of the designers would be the place of supply of goods.
3. If a supply of goods does not involve transportation, then the place of supply would be the location of the goods at the time of delivery to the recipient.
   1. For example, the clothing sold by a designer in a store at Tamil Nadu would have the place of supply mentioned as Tamil Nadu.
4. If goods are assembled or installed at a site, the place of supply would be the place of installation or assembly.
5. For goods sold on-board a vessel or vehicle, the place of supply would be the location where the goods were taken on board.

For goods imported into India, the location of the importer would be the place of supply. For goods exported from India, the place of supply would be a location outside of India.

Place of Supply for Services

The default method to be used for determining the place of supply for services is:

• If the supply of service is made to a person registered under GST, then the location of the recipient would be the place of supply.
• If a supply of service is made to a person not registered under GST, then the location of the recipient on record would be the place of supply. If the location of the recipient is not determinable, then the location of the supplier would be the place of supply.

Separate provisions have been provided in the IGST Act for determining the place of supply for various types of services like architect services, restaurants, transportation service and more. The above methodology is applicable only for supply of services for which provisions have not been provided for in the IGST Act.

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