Place of Supply

Place of Supply (POS) is one of the most critical concepts under the Indian GST framework. It is the deemed location where a supply of goods or services is considered to have occurred. The place of supply determines whether a transaction is intra-state (within the same state) or inter-state (between different states or between India and another country), which directly controls which tax head applies.

Getting the place of supply right is not optional — an incorrect determination leads to the wrong tax being charged, causing compliance issues for both the supplier and the recipient.

Why Place of Supply Matters

Under GST, three different taxes can apply depending on the nature of the transaction:

CGST + SGST apply when the supplier and the place of supply are in the same state (intra-state supply).

IGST applies when the supplier and the place of supply are in different states or when the supply is to a recipient outside India (inter-state supply or export).

The revenue from CGST goes to the central government, SGST to the state government, and IGST is later apportioned between the two. The place of supply is the mechanism that ensures the right government receives the right tax.

Place of Supply for Goods

For goods, the place of supply is relatively straightforward — it is generally the location where the goods are delivered to the recipient. Key rules include:

When goods are delivered to the recipient directly, the place of supply is the location of delivery.

When goods are supplied on a "bill to — ship to" basis (where the billing address and delivery address differ), the place of supply is the billing address (principal place of business of the buyer).

For goods that are assembled or installed at site, the place of supply is the location of installation.

Place of Supply for Services

Services are more complex. The rules differ based on whether the recipient is a registered business (B2B) or an unregistered individual (B2C), and on the nature of the service itself.

General Rule (B2B Services)

For services provided to a registered recipient, the place of supply is the registered address of the recipient.

General Rule (B2C Services)

For services provided to an unregistered individual, the place of supply is the location of the supplier — unless a specific rule overrides this.

Specific Rules for Certain Services

Place of Supply for Export of Services

For export of services, the place of supply is deemed to be outside India, which qualifies the supply as a zero-rated supply. This is what entitles the exporter to issue invoices without GST (under LUT) or claim a GST refund on the IGST paid.

Place of Supply on a GST Invoice

The place of supply must be mandatorily mentioned on every tax invoice for inter-state supplies and is recommended for all supplies. It is especially important in B2B transactions so the recipient can correctly claim Input Tax Credit (ITC).

For example, a supplier in Maharashtra providing IT services to a client registered in Karnataka must charge IGST (inter-state), with the place of supply shown as Karnataka on the invoice.

Common Mistakes in Determining Place of Supply

Charging CGST + SGST on an inter-state supply (or vice versa) is one of the most common GST errors. It results in the wrong tax being deposited with the wrong government and cannot be offset — meaning the supplier must pay the correct tax again while seeking a refund of the wrongly paid tax.

When in doubt about the place of supply, especially for complex service transactions, it is advisable to consult a GST professional or refer to Sections 10 to 13 of the IGST Act, 2017, which contain the complete place of supply provisions.

Use JetInvoice's free GST Invoice Generator to automatically determine the correct tax head (IGST or CGST + SGST) based on the supplier and buyer's state — no manual place of supply calculation needed.