The Integrated Goods and Services Tax (IGST) Act uses Place of Supply (POS) rules to decide when IGST applies to goods and services. Sections 10 to 13 of the IGST Act explain how to determine the POS in different situations. Knowing these rules helps businesses identify whether a transaction is interstate and subject to IGST.
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What Is Place of Supply for Domestic Goods (Other Than Imports and Exports)

Section 10 deals with goods supplied within India, excluding imports and exports. When the supply involves movement of goods, the POS is the location where the goods end up for delivery. For example, goods sent from Delhi to Mumbai will have Mumbai as the POS. In a Bill to Ship to transaction, when goods are delivered to someone on the instructions of a third party, the POS is the principal place of business of that third party.

If goods are not moved, the POS is the location where the goods are at the time of delivery. When goods are assembled or installed at a site, the POS is that site, such as machinery supplied from Delhi and installed in Haryana having Haryana as the POS. For goods supplied on board a train, aircraft, vessel, or vehicle, the POS is the place where the goods are taken on board. If these rules cannot determine the POS, the government prescribes the method to ascertain it.

What Is Place of Supply for Imports and Exports of Goods

Section 11 applies to goods entering or leaving India. For imports, the POS is the importer’s location in India. For exports, the POS is outside India since the goods are leaving the country.

Section 12 covers services when both the supplier and the recipient are in India. The POS depends on the type of service. For passenger transport services, the POS is where the passenger begins the journey. In banking and financial services, the POS is generally the location of the service recipient. In telecommunication services, the POS is based on the billing address or the place where the service is used.

What Is Place of Supply for International Services

Section 13 applies when the supplier or the recipient is outside India. The POS is usually the recipient’s location, but special rules apply in certain cases. For passenger transport, the POS is the place where the passenger starts the journey. For services related to goods, the POS is where the goods are physically located. In intermediary services, the POS is the supplier’s location. For the transport of goods, the POS is determined based on where the goods are handed over for transportation.

When IGST Applies

IGST applies when the POS is in a different State or Union Territory from the supplier’s location. These rules ensure correct tax collection and help decide whether a transaction is interstate or intrastate.

Conclusion

Sections 10 to 13 of the IGST Act clearly define how to determine the Place of Supply for goods and services. This determination is crucial for deciding IGST liability. Understanding these rules ensures proper tax application, smooth compliance, and avoids disputes in GST transactions.