Place of Supply Rules in GST — The 2026 Guide for Indian Businesses

A Bangalore SaaS sells to a Mumbai client whose GSTIN is in Hyderabad. A Mumbai event organiser hosts a conference in Goa. A Chennai consultant trains an Ahmedabad team over Zoom. Each one trips up freelancers and CAs because place of supply isn't the billing address. Get it wrong and your buyer's input tax credit gets stuck in GSTR-2B and you eat a credit note. This 2026 guide unpacks Section 10, 12, and 13 of the IGST Act with 5 worked examples and the four mistakes most Indian businesses make.

TL;DR — what is place of supply

"Place of supply" is not the buyer's billing address — it is whatever the IGST Act says it is. Section 10 covers goods, Section 12 covers services within India, Section 13 covers cross-border services. You read down the clauses until one matches; that gives you the POS, and its state code goes on your invoice.

Why place of supply matters

Three things ride on POS: the tax type you charge, the state that gets the revenue, and your buyer's input tax credit. Charge CGST+SGST when IGST applies and your buyer's GSTR-2B won't match — their ITC stalls, they ask you to reissue, and you eat a credit note.

For services that travel — events, training, transport, property, advertising — POS is rarely the billing address. A Mumbai company billed at head office can have POS in Goa if you photograph their wedding there. Tax authorities use POS mismatches as a flag for Section 73/74 demand notices, with 18% interest under Section 50 on short-paid tax.

Place of supply for goods (Section 10)

Goods are the easier half. Section 10 has four practical rules:

• Movement of goods. POS = where the movement terminates for delivery. Chennai factory ships to Pune → POS Maharashtra.
• No movement. POS = location of goods at delivery. Bangalore showroom sells a generator collected on-site → POS Karnataka, regardless of buyer's state.
• Installed or assembled. POS = site of installation. Delhi vendor installs server racks in Hyderabad → POS Telangana.
• On board a conveyance. POS = the first scheduled point of departure of that conveyance.

For B2B goods that move across states, POS = delivery location. This is one of the few cases where billing address and POS usually align.

Place of supply for services (Section 12)

Section 12 applies when both parties are in India. General rule: recipient's registered location (B2B) or address on record (B2C). Eleven specific overrides apply for particular services — memorise them, because the general rule only kicks in when no override fits.

General rule — Section 12(2)

Registered recipient → recipient's location. Unregistered → address on record; if none, supplier's location. A SaaS sold to a Hyderabad-registered buyer has POS in Telangana even if the user logs in from Bangalore.

Immovable property — Section 12(3)

Architects, interior designers, valuers, real estate agents, hotel accommodation → POS = property location. A Mumbai architect designing a Goa villa has POS in Goa.

Restaurant, catering, grooming, fitness — Section 12(4)

POS = where service is performed. The salon is in Bandra → POS Maharashtra, regardless of customer's home state.

Admission to an event — Section 12(6)

POS = the venue. IPL tickets in Chennai have POS Tamil Nadu, even if sold online to a Bengaluru fan.

Organising an event — Section 12(7)

Registered recipient → recipient's location. Unregistered → the venue. Mumbai organiser, Bangalore conference, unregistered attendees → POS Karnataka, charge IGST.

Transport of goods — Section 12(8)

Registered recipient → recipient's location. Unregistered → handover location. Couriers must capture the consignee's GSTIN to apply the registered rule.

Passenger transport — Section 12(9)

POS = embarkation point. Delhi–Mumbai flight → POS Delhi.

Telecom — Section 12(11)

Fixed line/leased circuit/DTH → installation address. Mobile post-paid → billing address on record. Pre-paid over the counter → seller's location. Pre-paid sold electronically → recipient's address on record.

Banking, insurance — Section 12(12)/(13)

POS = recipient's location on supplier's records; if no address, supplier's location.

Advertising to government — Section 12(14)

Ads disseminating across states → POS = each state proportionally. A campaign 60% Maharashtra and 40% Karnataka splits 60:40 across two invoices.

Training and performance appraisal — Section 12(5)

Registered recipient → recipient's location. Unregistered → where training is performed.

Place of supply for cross-border services (Section 13)

Section 13 applies when supplier or recipient is outside India. Default rule: POS = recipient's location. If that's outside India, the supply usually qualifies as zero-rated export of services under Section 16 — IGST at 0% plus refund of input GST.

The overrides that matter most:

• Immovable property abroad → property's location. Mumbai architect designing a Dubai villa → POS UAE, export of services.
• Performance-based services (training, physical repairs, restaurant) → where performed. Bengaluru technician flying to Singapore → export.
• Intermediary services (commission agents, brokers) → supplier's location. Indian intermediaries often can't claim export benefits even when paid in forex.
• OIDAR (online information and database) → recipient's location. Pune SaaS billing a US customer = export; US SaaS billing an Indian B2C customer must register and pay IGST.

The intermediary rule catches many India-based BPO and recruiting firms — they think they're exporting because the client is overseas, but the law treats POS as their own location, so IGST applies.

5 real-world examples with worked-out tax math

Example 1 — Mumbai organiser hosts a Bangalore conference

Seller in Maharashtra (27). Event in Bangalore for unregistered attendees. Per Section 12(7), POS = venue → Karnataka (29). Different state → IGST. ₹10,00,000 at 18% = ₹1,80,000 IGST. Total: ₹11,80,000.

Example 2 — Chennai SaaS bills a Hyderabad-registered customer

Seller in Tamil Nadu (33). Customer's GSTIN registered in Telangana (36); contract billing address is Mumbai. Per Section 12(2), POS = registered location → Telangana. Different state → IGST. ₹50,000 at 18% = ₹9,000 IGST. Total: ₹59,000. The Mumbai address is irrelevant — GSTIN state wins.

Example 3 — Bengaluru photographer shoots a Goa wedding

Seller in Karnataka (29). Service performed in Goa (30). Performance-based service tied to a venue → POS Goa. Different state → IGST. ₹1,50,000 at 18% = ₹27,000 IGST. Total: ₹1,77,000.

Example 4 — Delhi ad agency runs a campaign across 5 states

Seller in Delhi (07). Govt ad contract ₹25 lakh disseminating in DL, MH, KA, TN, WB in 30:25:20:15:10. Per Section 12(14), POS = each state proportionally. Five invoices: ₹7.5L Delhi (CGST+SGST), ₹6.25L MH, ₹5L KA, ₹3.75L TN, ₹2.5L WB (all IGST).

Example 5 — Mumbai consultant trains an Ahmedabad team online

Seller in Maharashtra (27). Recipient registered in Gujarat (24). Per Section 12(5), training to a registered recipient = recipient's location → Gujarat. Different state → IGST. ₹2,00,000 at 18% = ₹36,000 IGST. Total: ₹2,36,000. Online delivery doesn't change the rule — the GSTIN state wins.

Top 4 mistakes that cost penalties

Mistake 1 — Using buyer's billing address instead of the POS rule

The most common error. The billing address is in Mumbai but the event is in Bangalore, the property is in Goa, or the GSTIN is registered in Hyderabad. Billing address is just for posting the invoice. POS is whatever Section 12 or 13 says it is.

Mistake 2 — Forgetting performance-based POS for restaurants, training, events

Restaurants, salons, gyms, training, events, and admission tickets are venue-based. POS is where the service is performed, not where the customer is from. A Bengaluru caterer serving a Pune wedding has POS Maharashtra and charges IGST.

Mistake 3 — Ignoring Section 13 for foreign clients

Indian agencies billing US, EU, or UAE clients sometimes charge IGST out of habit. If the recipient is outside India and paid in forex, the supply usually qualifies as export of services. Charge IGST at 0% and claim refund of input GST.

Mistake 4 — Not splitting POS across states for multi-state services

Section 12(14) and similar attribution rules require you to split the value across each state proportionally and raise separate invoices. Many agencies bundle a whole campaign into one IGST invoice — that's a misclassification, and receiving states can dispute their share later.

Seller-vs-POS quick reference

Once you have the POS, the rest is arithmetic. Compare seller's GSTIN state with POS state:

Frequently Asked Questions