GST resources
Place of Supply: Which Tax Applies
Every GST invoice has to answer one question before any tax is calculated: where is this supply made? If the place of supply is in your own state, you charge CGST and SGST. If it is in another state, you charge IGST.
Why it matters
The rate is the same either way: 18% is 9% CGST plus 9% SGST, or 18% IGST. What changes is which government gets the tax. Charge the wrong type and the law treats it as unpaid: you must pay the right tax and claim a refund of the wrong one, and your customer's credit gets stuck in between.
The rules are in the IGST Act: section 10 for goods, sections 12 and 13 for services. The location of the supplier is compared with the place of supply. Same state means intra-state; different states means inter-state.
Goods
| Situation | Place of supply |
|---|---|
| Goods are delivered or moved to the buyer | Where the movement ends (delivery address) |
| Bill-to-ship-to: you bill one buyer but deliver to another person on its instruction | The principal place of business of the buyer you bill |
| Customer collects goods over the counter | Your shop's location |
| Goods assembled or installed at a site | Where they are installed |
Common services
| Service | Place of supply |
|---|---|
| General rule, to a registered business | The customer's location (state of its GSTIN) |
| General rule, to an unregistered customer | The customer's address on record, otherwise your location |
| Restaurant and catering, beauty and fitness services | Where the service is actually performed |
| Repairs, such as a phone repaired at your counter | The general rule above applies |
| Services related to immovable property, such as renting or construction | Where the property is |
| Training | For a registered customer, its location; otherwise where it is performed |
Simplified from sections 12 and 13 of the IGST Act; special rules apply to transport, telecom, banking and exports.
Worked examples
Sri Lakshmi Stores is in Mysuru, Karnataka (state code 29). A walk-in customer buys ₹1,000 of goods at 18%: place of supply is Karnataka, so the bill shows CGST ₹90 and SGST ₹90.
A hotel in Ooty, Tamil Nadu (33), orders ₹20,000 of goods at 5% delivered to Ooty: movement ends in Tamil Nadu, so the invoice charges IGST ₹1,000. If instead the Ooty hotel's owner collects the goods at the Mysuru counter, the place of supply is Karnataka and the bill carries CGST ₹500 and SGST ₹500, even though the buyer is from another state.
A Bengaluru company (also 29) asks the store to bill it but deliver to its guest house in Wayanad, Kerala (32). Under the bill-to-ship-to rule the place of supply is Karnataka, the billed buyer's state, so CGST and SGST apply.
Common mistakes
- Deciding the tax from the buyer's address instead of the delivery address for goods
- Charging IGST to a customer from another state who collects goods at your counter
- Missing the bill-to-ship-to rule for orders delivered to a third party
- Leaving the place of supply field blank on B2C invoices above the threshold
- Charging IGST for a restaurant meal eaten in your restaurant by a tourist from another state
How it shows up on invoices and returns
A tax invoice must state the place of supply with the state name when it differs from the supplier's state, and B2C invoices of ₹50,000 or more must carry the delivery address and state. In GSTR-1, B2B invoices carry the place of supply; inter-state B2C sales are reported state-wise, and invoices above ₹1 lakh to unregistered buyers in another state are reported one by one. GSTR-3B table 3.2 shows inter-state supplies to unregistered persons by state.
How TripleBill helps
TripleBill takes the place of supply from the customer's state (from the GSTIN or address) and lets you change it on the invoice for deliveries elsewhere; CGST/SGST or IGST follows automatically, and GSTR-1 reports it correctly.
This page is general information about GST in India, not tax advice. Rates, thresholds and rules change; confirm with the GST portal or a chartered accountant before acting.
Last reviewed and sources
Last reviewed: November 2026. Facts on this page were checked against:
- IGST Act, 2017, sections 7, 8, 10, 12 and 13
- CGST Act, 2017, section 77 and IGST Act, section 19 (tax paid under the wrong head)
- CGST Rules, 2017, rule 46
Frequently asked questions
My customer is from another state but buys at my shop. CGST/SGST or IGST?
For goods handed over at your counter, the place of supply is your shop, so CGST and SGST.
I deliver to another state by courier. Which tax?
IGST, because the movement of goods ends in another state.
What happens if I charged IGST instead of CGST and SGST?
You must pay the correct tax and then claim a refund of the tax wrongly paid. No interest is payable on the correct tax in that case, but it takes time and paperwork.
Is the place of supply always the buyer's GSTIN state?
For most services to registered businesses, yes. For goods, it depends on where the movement ends or, for bill-to-ship-to, the billed buyer's principal place of business.
Do I need to show the place of supply on B2C bills?
Rule 46 requires it on tax invoices; for unregistered buyers it is mandatory with the delivery address when the invoice is ₹50,000 or more. Billing software prints it on every invoice by default.
What about sales to an SEZ?
Supplies to an SEZ unit or developer are treated as inter-state and zero-rated, whatever the location.
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