Taxation Laws
Place and Time of Supply under GST: IGST Act
GST is a destination based tax, so the law must decide where each supply takes place. Comparing the supplier's location with the place of supply tells us whether the supply is intra-State, attracting Central and State GST, or inter-State, attracting Integrated GST. The time of supply then decides when tax becomes payable. This note covers place of supply under the IGST Act and time of supply under the CGST Act.
1. Intra-State or Inter-State
Figure 1: Sections 7 and 8 of the IGST Act
- Inter-State, s.7. Where the location of the supplier and the place of supply are in two different States or Union Territories; imports, exports and supplies to or by a Special Economic Zone are also inter-State.
- Intra-State, s.8. Where the location of the supplier and the place of supply are in the same State or Union Territory.
- Article 286. The constitutional bar on States taxing supplies outside the State or in the course of import or export is given effect by these rules (Topic 5)
2. Place of Supply of Goods: Section 10
Figure 2: Goods within India
Where the supply involves movement of goods, the place of supply is where the movement terminates for delivery to the recipient. Where goods are delivered to a recipient on the direction of a third person, the place of supply is the principal place of business of that third person. Where there is no movement, it is the location of the goods at delivery; where goods are installed or assembled, the place of installation; and where goods are supplied on board a conveyance, the place where they are taken on board.
3. Place of Supply of Services: Sections 12 and 13
Figure 3: Services
- Section 12. Where both supplier and recipient are in India: the general rule looks to the recipient's location if registered, and otherwise to his address on record or the supplier's location; specific rules apply to immovable property, performance based services, events, transport and others.
- Section 13. Where either is outside India: the general rule is the recipient's location, with exceptions such as services on goods physically made available, immovable property and events. The Finance Act, 2026 omitted s.13(8)(b), which had placed intermediary services at the supplier's location; they now follow the general rule, prospectively.
4. Time of Supply
Figure 4: Sections 12 and 13 of the CGST Act
- Goods, s.12. The earlier of the date of issue of invoice, or the last date by which it should have been issued, and the date of receipt of payment; tax on advances for goods has been exempted by notification for most suppliers.
- Services, s.13. Where the invoice is issued within the prescribed time, the earlier of the invoice date and the date of payment; otherwise, the earlier of the date of provision of service and the date of payment.
- Reverse charge. Ordinarily the date of payment, or a specified period after the date of the supplier's invoice, whichever is earlier.
⚠ Exam trap If the supplier's location and place of supply are in different States, the supply is inter-State and attracts IGST (s.7 IGST Act); if in the same State, CGST and SGST (s.8). Imports and supplies to or by a Special Economic Zone are inter-State. For goods with movement, place of supply is where movement terminates; for bill to ship to, the third person's principal place of business. For services, the general rule is the recipient's location; since the Finance Act, 2026, this also applies to cross border intermediary services. |
5. Frequently Asked Questions
Is a supply to a unit in a Special Economic Zone in the same State intra-State?
No. Under s.7 of the IGST Act, a supply to or by a developer or unit in a Special Economic Zone is treated as an inter-State supply and attracts IGST.
What is the place of supply for services relating to immovable property?
The location of the immovable property, under s.12 of the IGST Act where both parties are in India.
What is the place of supply in a bill to, ship to transaction?
Where goods are delivered to a recipient on the direction of a third person, the third person is deemed to have received the goods, and the place of supply is his principal place of business, under s.10(1)(b) of the IGST Act.
Where is the place of supply of intermediary services to a foreign client?
Until the Finance Act, 2026, s.13(8)(b) of the IGST Act placed it at the supplier's location in India. That clause has been omitted, so intermediary services now follow the general rule of the recipient's location and can qualify as exports. The change is prospective; earlier periods remain governed by the old rule.
6. Related Topics
- Topic 5: Restrictions on Taxing Power. Article 286.
- Topic 27: Supply and Levy. What a supply is.
- Topic 29: Input Tax Credit. Credit across States.