Goods and Services Tax (GST) is a destination based consumption tax where tax flows to the place where goods and services are finally consumed. Under the GST law, the place of supply provision is based on destination/consumption based principle. Place of supply determines whether a particular supply would be intra-state supply or inter-state supply. If a particular supply qualifies to be a intra-state supply, then CGST+SGST would be leviable on such supply. On the other hand, if a supply falls under the category of inter-state supply, then IGST would be leviable on that supply. Section 10 of the IGST Act, 2017 specifies the place of supply of goods other than supply of goods imported into, or exported from India.
Following are the provisions of section 10 of the IGST Act, 2017 –
| Sl No | Section | Circumstances | Place of Supply of Goods |
| 1 | 10(1)(a) | Where the supply involves movement of goods | Location of the goods at the time at which the movement of goods terminates for delivery to the recipient. |
| 2 | 10(1)(b) | Where the goods are delivered by the supplier to a recipient or any other person on the direction of a third person, whether acting as an agent or otherwise (Bill to/Ship to Case) | Principal place of business of the third person. |
| 3 | 10(1)(c) | Where the supply does not involve movement of goods | Location of such goods at the time of the delivery to the recipient. |
| 4 | 10(1)(d) | Where the goods are assembled or installed at site | Place of such installation or assembly. |
| 5 | 10(1)(e) | Where the goods are supplied on board a conveyance, including a vessel, an aircraft, a train or a motor vehicle | Location at which such goods are taken on board. |
| 6 | 10(2) | Where the place of supply of goods cannot be determined as per the sub-section 10 (1) above | The place of supply shall be determined in such manner as may be prescribed. |
Example
- Mr A of Mumbai, Maharashtra sells certain goods to Mr B of Pune, Maharashtra. Here, the place of supply would be Pune, Maharashtra. As the supply has been made within the same state, CGST+ SGST would be leviable.
- Mr. A of Mumbai, Maharashtra, sells certain goods to Mr B of Ahmedabad, Gujrat. Here, place of supply would be Ahmedabad, Gujrat. As the supply has been made to a different state, IGST would be leviable.
- Mr A of Mumbai, Maharashtra sells certain goods to Mr B of Pune, Maharashtra. However, Mr B instructed Mr A to deliver the goods directly to Mr C of Ahmedabad, Gujrat. Here, place of supply for Mr A would be Maharashtra. The said goods would be deemed to have been received by Mr B even though the goods have been sent directly to Mr C of Ahmedabad, Gujrat.
- M/s A of Mumbai, Maharashtra installs a plant at Ahmedabad, Gujrat for Mr B. Here, place of supply would be Ahmedabad, Gujrat.
- Mr A travelled from Mumbai to Ahmedabad by air. He purchased certain food items while on board. The said food items were loaded by the airlines at Mumbai. The airlines is registered in 7 states including Maharashtra and Gujrat. Here, place of supply would be Maharashtra as the food items were taken on board in Mumbai.
- Mr A, an unregistered person of Ahmadabad comes to Mr B of Mumbai and purchases goods worth Rs 3,00,000/- for resale. Mr B delivers the goods to Mr A at his factory gate. Mr A will arrange necessary transportation to bring those goods to Ahmadabad. In this case, place of supply would be Ahmadabad as movement in goods is caused by the buyer and will be completed at Ahmadabad. This transaction also attracts the provisions of e-way bill and Mr B is required to mention the state code of Mr A in his invoice.