Place of supply under GST — rules and examples.

Why place of supply matters

Place of supply is the single fact that decides which tax you charge on a sale: CGST + SGST if the place of supply is in the same state as your registration, or IGST if it's in a different state (or outside India). It is not about where your business is registered, and it is not simply "wherever the customer is" — each supply type has its own rule, and getting the wrong one corrupts your GSTR-1's B2B split from the first invoice.

A wrong call has consequences beyond your own return. If you charge CGST+SGST on what should have been an inter-state supply, your buyer's GSTR-2B shows the wrong tax type against your GSTIN, and they may not be able to claim the credit cleanly — see our GST guide for how return filing connects to this.

Place of supply for goods

For goods, the law generally follows where the goods physically end up, not where either party is registered:

• Supply involves movement — place of supply is the location where movement of goods terminates for delivery to the recipient. If you ship from Delhi to a buyer in Mumbai, place of supply is Mumbai, regardless of your own registration state.
• Supply does not involve movement — place of supply is the location of the goods at the time of delivery to the recipient. A common case: goods sold but left in your own warehouse for the buyer to collect later — place of supply is your warehouse's location.
• Goods assembled or installed at site — place of supply is the site of installation or assembly, even if the components travelled from elsewhere.

Place of supply for services

The default rule for services is simpler to state but easy to misapply: place of supply is the location of the recipient — their registered place of business if they hold a GSTIN, or their address on record if they don't. A handful of specific supplies override this default:

• Services related to immovable property (architects, interior work, real estate agents, construction) — place of supply is where the property is located, not where the recipient sits.
• Admission to or organisation of an event (conferences, exhibitions, celebrations) — place of supply is where the event is actually held.
• Transportation of goods — for a registered recipient, the default rule applies (location of recipient); for an unregistered person, place of supply is where the goods are handed over for transport.
• Restaurant, catering and personal/beauty services — place of supply is where the service is actually performed, regardless of the recipient's registered address.

These exceptions exist because, for these specific supplies, the location of the recipient often has nothing to do with where the economic benefit is actually consumed.

Worked examples

Common mistakes

The most frequent error we see in Chartered Accountant practice: an inter-state sale gets posted to a local (CGST+SGST) ledger by habit — often because the customer's billing address is local even though the ship-to state is different, or because a sales team member picks the wrong ledger under time pressure. The result is a GSTR-1 that doesn't match reality, and a reconciliation headache later; our sales ledger mismatch detector post walks through exactly how this happens and how to catch it before filing.

The fix is to stop relying on manual ledger selection. TatvaBooks validates place of supply on every sale voucher — using the ship-to state, the customer's GSTIN, and the nature of the supply — and applies CGST+SGST or IGST automatically, so the tax type is correct before the invoice is even saved. See how invoicing handles this on our GST billing software page.

Frequently asked questions