GST
Answer a few questions about the transaction and see whether it attracts CGST+SGST or IGST, which clause of the IGST Act decides it, and why — with the reasoning laid out so you can defend the answer.
This decides which family of clauses applies. Goods and services are governed by different sections, and cross-border supplies by a third.
Movement, installation, bill-to/ship-to — IGST Act s.10
Only the facts the chosen clause actually needs are asked for. Fields appear and disappear as your answers change.
The state from which you make the supply. Compare this with the place of supply — that comparison is the whole answer.
The state in the recipient's GSTIN, or their address if unregistered.
Leave it on automatic and we pick the clause from your answers. Choose one directly when you already know which sub-clause governs.
Facts this clause needs
Where the movement of the goods actually terminates.
Fill this in only when a third person directed you to deliver somewhere else. Doing so switches the answer to s.10(1)(b).
Which version of the law we apply. s.13(8)(b) was omitted on 2026-03-30 and s.13(9) on 2023-10-01 — a supply before those dates is judged under the old text.
Indian GST is a destination tax collected by two governments at once. Every taxable transaction has to be pinned to exactly one state before you can decide which tax to charge, and the rule that does the pinning is called the place of supply. Get it right and the tax flows to the state that is entitled to it. Get it wrong and the credit dies in your customer's books — with your money already paid to the wrong government.
This page walks through the statutory rules in IGST Act ss.10 to 13, shows the two traps that catch people out most often, and covers the 2026 repeal of the intermediary clause that changed how support services for an overseas parent are taxed.
Korean VAT — like most national VAT systems — has a single rate collected by a single tax authority. There is no equivalent of splitting one 18% levy into a central half and a state half, and no need to work out which of 36 jurisdictions a transaction belongs to. Coming from a system like that, reading 'the customer is in Chennai' and concluding that the tax follows the customer is a reasonable inference.
Indian GST does not work that way. The buyer's billing address is one input among many, and for several categories it is not an input at all. Immovable property services follow the property. Training follows where the training happens. Event admission follows the venue. And under bill-to/ship-to the goods can travel a thousand kilometres to a state that never appears as the place of supply.
The practical consequence is that the same customer can be an intra-state customer on one invoice and an inter-state customer on the next, depending on what you supplied and where. That is normal, and any process that assumes one customer means one tax treatment will produce wrong invoices.
Once you have the place of supply, compare it with the state you are supplying from. That single comparison decides everything else.
| When | Charge | What it means in practice |
|---|---|---|
| Place of supply is in the supplier's own state | CGST + SGST | Intra-state supply under IGST Act s.8. Split the combined rate in half and show two lines. An 18% supply is 9% + 9%. |
| Place of supply is in another state | IGST | Inter-state supply under IGST Act s.7. One line at the full combined rate. Never split it. |
| Place of supply is in a union territory without a legislature | CGST + UTGST | Chandigarh, Lakshadweep, Andaman & Nicobar, Ladakh, Dadra & Nagar Haveli and Daman & Diu. Delhi, Puducherry and Jammu & Kashmir have legislatures and levy SGST. |
| Place of supply is outside India, or the recipient is an SEZ | IGST | Inter-state under s.7(5). If it is an export or a supply for an SEZ's authorised operations, it is zero-rated under s.16 — supply under LUT with no tax, or pay IGST and claim it back. |
Goods, domestic services and cross-border services are governed by different sections, and picking the wrong section is the fastest way to a wrong answer. These tables are the whole statutory scheme in summary.
| Clause | Situation | Place of supply |
|---|---|---|
| s.10(1)(a) | The supply involves movement of the goods | Where the movement ends for delivery to the recipient |
| s.10(1)(b) | A third person directs delivery to someone else (bill-to / ship-to) | The principal place of business of that third person — the buyer, not the delivery address |
| s.10(1)(c) | No movement of the goods | Where the goods are located at the time of delivery |
| s.10(1)(d) | Goods assembled or installed at site | The site of assembly or installation |
| s.10(1)(e) | Goods supplied on board a conveyance | Where the goods were taken on board |
| s.11(a) | Import of goods | The location of the importer |
| s.11(b) | Export of goods | Outside India |
| Clause | Situation | Place of supply |
|---|---|---|
| s.12(2) | General rule | Registered recipient: their registered location. Unregistered: the address on record, otherwise the supplier's location |
| s.12(3) | Immovable property, hotel, accommodation, architects, surveyors | Where the property is located, whatever the recipient's registration says |
| s.12(4) | Restaurant, catering, grooming, fitness, beauty, health | Where the service is actually performed |
| s.12(5) | Training and performance appraisal | Registered: recipient's location. Unregistered: where the training is held |
| s.12(6) | Admission to an event or amusement park | Where the event is held |
| s.12(7) | Organising an event, sponsorship | Registered: recipient's location. Unregistered: where the event is held |
| s.12(8) | Transportation of goods, including courier | Registered: recipient's location. Unregistered: where the goods are handed over |
| s.12(9) | Passenger transportation | Registered: recipient's location. Unregistered: where the passenger embarks |
| s.12(10) | Service supplied on board a conveyance | The first scheduled point of departure |
| s.12(11) | Telecom, broadcasting, cable, DTH, internet | Fixed line: where installed. Post-paid: billing address. Pre-paid: agent's address, or the address on record |
| s.12(12) | Banking, financial services, stock broking | The recipient's address on the supplier's records; failing that, the supplier's location |
| s.12(13) | Insurance | Registered: recipient's location. Unregistered: the address on record |
| s.12(14) | Advertisement to a government body | Apportioned across every state the advertisement is disseminated in |
| Clause | Situation | Place of supply |
|---|---|---|
| s.13(2) | General rule | The location of the recipient; if unavailable in the ordinary course of business, the supplier's location |
| s.13(3)(a) | Work on goods made physically available to the supplier | Where the service is performed. Goods imported only for repair and re-exported are carved out |
| s.13(3)(b) | Service needing the individual's physical presence | Where the service is performed |
| s.13(4) | Immovable property | Where the property is located |
| s.13(5) | Admission to or organisation of an event | Where the event is held |
| s.13(8)(a) | Banking service to an account holder | The location of the supplier |
| s.13(8)(b) | Intermediary services | Omitted with effect from 30 March 2026. Now falls back to s.13(2) |
| s.13(8)(c) | Hire of a means of transport for up to one month | The location of the supplier |
| s.13(9) | Transportation of goods | Omitted with effect from 1 October 2023. Now falls back to s.13(2) |
| s.13(10) | Passenger transportation | Where the passenger embarks for the continuous journey |
| s.13(11) | Service supplied on board a conveyance | The first scheduled point of departure |
| s.13(12) | OIDAR services | The location of the recipient |
This is the rule with no counterpart in a single national VAT such as Korea's, and it is the one that produces the most wrong invoices. Where goods are delivered to a third person on the direction of a buyer, the law deems that buyer to have received the goods. The place of supply is the buyer's principal place of business — regardless of where the truck actually went.
The mistake is easy to make because everything on the shipping documents points the other way. The consignee is real, the delivery address is real, the goods physically arrive in another state. None of that decides the tax.
Two places have to agree with each other: the place of supply you print on the invoice, and the place of supply you report in GSTR-1. If you report the ship-to state, the tax lands in the wrong state's account and your buyer's GSTR-2B will not match their books.
Any service directly in relation to immovable property is taxed where the property is. That covers architects, interior designers, surveyors, estate agents, engineers, accommodation in a hotel or guest house, letting of commercial space, and ancillary services to any of those.
The clause overrides the recipient's registration completely. It does not matter that your client is registered in Delhi, pays from Delhi and wants the invoice addressed to Delhi. If the building is in Mumbai, the place of supply is Maharashtra.
It bites hardest on project work away from your own state: fit-out on a new office, factory construction supervision, and long-stay hotel bookings all land in the state where the site or the hotel is. If you are not registered in that state, you are still liable to charge and report the tax under the registration you make the supply from — and your client can only take the credit if their own registration matches the place of supply.
Until 30 March 2026, IGST Act s.13(8)(b) said that for intermediary services the place of supply was the location of the supplier. An Indian company that arranged or facilitated a supply between its overseas parent and a third party therefore had a place of supply in its own state. The supply was intra-state, CGST+SGST applied, and it could never be an export — even though the invoice went abroad and the money came back in foreign currency.
The Finance Act 2026 omitted that clause. From 30 March 2026 intermediary services fall back to the default rule in s.13(2): the place of supply is the location of the recipient. Where the recipient is a Korean or other overseas parent, the place of supply is outside India, and the supply can qualify as an export of services under s.2(6) — zero-rated, supplied under LUT without tax, with a refund of accumulated input credit available.
This matters most to liaison-type Indian arms of overseas groups: market research for headquarters, vendor identification, purchase support, quality follow-up with local suppliers. Those arrangements sat awkwardly against the old clause for eight years and generated a long line of disputes.
Place of supply = your own state. Intra-state supply, CGST+SGST charged on an invoice to a foreign client who has no way to claim it. This is why so many overseas-owned Indian service arms carried a credit balance they could never use.
Place of supply = the recipient's location, i.e. outside India. Where the five conditions of s.2(6) are met, the supply is a zero-rated export. File the LUT, invoice without tax, and claim the refund of unutilised input credit.
It does not change the definition of an intermediary in s.2(13), which still turns on whether you arrange a supply between two other persons or supply on your own account. If you always supplied research on your own account, s.13(8)(b) never applied to you and nothing has changed. It also does not act backwards: a supply made before 30 March 2026 is judged under the old text, which is why the reference date at the top of this page changes the answer.
The cost of an error is not a penalty on a rate. It is the customer's credit, and it is usually discovered a year later during a reconciliation.
A state can only give credit for the tax its own law levies. CGST+SGST paid to Maharashtra is invisible to a buyer registered in Karnataka. They reverse the credit, you pay IGST afresh, and you apply for a refund of the tax paid under the wrong head.
The mirror image, and just as expensive. The buyer's GSTR-2B shows an IGST credit their books do not support, and the mismatch surfaces at the annual reconciliation.
A supply to an SEZ unit or developer is inter-state under s.7(5)(b) even when the SEZ is inside your own state. Charging the state pair also breaks the zero-rating trail, so the refund route closes.
Under bill-to/ship-to the buyer's state is the place of supply. Reporting the delivery state in GSTR-1 sends the tax to a state with no claim on it and leaves the buyer's 2B permanently short.
Invoicing a foreign parent without tax feels like an export, but all five conditions have to hold. If the place of supply is in India on the applicable clause, the supply was always taxable and the tax is recovered from you with interest.
The questions that come up most often about place of supply.
Indian GST is levied by the centre and the states together, so every transaction has to be assigned to one state before you can decide which taxes apply. The place of supply is the statutory rule that makes that assignment. A national VAT such as Korea's has a single rate and a single collector, so the question never arises there. The concept is closer to the sourcing rules in US sales tax.
No, and assuming it is causes most of the errors we see. For a registered recipient of a general service it happens to coincide with their registered location, which is why the shortcut appears to work. It breaks the moment you supply goods on someone else's instruction, work on immovable property, run training, host an event, or transport passengers — each of which follows a different fact.
Delhi. Under IGST Act s.10(1)(b) the buyer who directs the delivery is deemed to have received the goods, so their principal place of business is the place of supply. The Chennai address goes on the invoice as the ship-to and nowhere else. If you are in Maharashtra, Maharashtra to Delhi is inter-state and you charge IGST.
For a registered recipient, the state in the GSTIN they gave you for this transaction — a company with registrations in several states chooses which one receives the supply, and that choice drives the place of supply. For an unregistered recipient it is the address you actually hold in your records, and if you hold none the supply falls back to your own location.
Because s.12(3) puts services in relation to immovable property at the property's location and overrides the recipient's registration. Maharashtra to Karnataka is inter-state, so IGST. This surprises people because the invoice is addressed to Delhi, but the address on the invoice never decides the place of supply.
No. Export of services requires all five conditions in s.2(6): the supplier in India, the recipient outside India, the place of supply outside India, payment in convertible foreign exchange, and the two parties not being mere establishments of the same person. A subsidiary and its parent are separate legal persons, so the last limb is usually satisfied — but the place of supply has to be checked clause by clause, and the foreign exchange has to be realised.
IGST Act s.13(8)(b) was omitted by the Finance Act 2026 with effect from 30 March 2026. Until then, intermediary services had their place of supply at the supplier's own location, which made them intra-state supplies attracting CGST+SGST even when the client was abroad. From that date they follow the default rule in s.13(2) — the recipient's location — so a supply to an overseas parent can now qualify as a zero-rated export.
No. The repeal removes one obstacle; it does not grant an exemption. You still have to satisfy s.2(6) in full, and you still have to check whether some other clause of s.13 applies — work on goods physically made available, immovable property, and events all have their own rules that survive untouched.
No. Section 7(5)(b) makes any supply to an SEZ unit or developer an inter-state supply, whatever the geography. Charge IGST, or supply under LUT without tax if it is for the SEZ's authorised operations. Charging CGST+SGST is the single most expensive mistake in this area because it also breaks the zero-rating trail.
You pay the correct tax and claim a refund of the wrongly paid tax; the law provides for that specific situation rather than treating it as evasion. The practical damage falls on the customer, whose credit is denied until the position is corrected, and on your working capital while the refund is processed. Fix it as soon as it is spotted rather than at the annual reconciliation.
You do. Import of services is an inter-state supply and the Indian recipient pays IGST under reverse charge, issues a self-invoice, and takes the credit where it is otherwise eligible. Your overseas parent issues an ordinary commercial invoice with no Indian GST on it.
Not directly. Registration follows the states from which you make supplies, not the places to which you supply. But a place of supply that keeps landing in a state where you have people, premises or a site is a strong signal that a registration there is due — and your customers in that state will ask for one so their credit works cleanly.
They occupy the same half of an intra-state levy. Union territories that have their own legislature — Delhi, Puducherry, and Jammu & Kashmir — levy SGST. Those without one — Chandigarh, Lakshadweep, Andaman & Nicobar, Ladakh, and Dadra & Nagar Haveli and Daman & Diu — levy UTGST instead. The rate and the credit treatment are the same; only the head and the return column differ.
Treat it as a well-reasoned starting point, not a determination. The tool applies the statutory clauses to the facts you enter and shows you the citation so you can check the reasoning yourself. Place of supply is fact-sensitive and several clauses are actively litigated, so have your Chartered Accountant confirm the position before you issue the invoice or file the return.