Interstate Supply & Place of Supply
The question that decides which tax you charge
The question that decides which tax goes on the invoice.
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Before you can charge anything, you have to know where the supply legally happens. If the place of supply is in the same state as the supplier, it is CGST plus SGST. If it is in a different state, it is IGST. The total is the same – but charging the wrong pair is a real problem to unwind.
For goods the answer usually follows the movement: where the goods are delivered. For services the rules are more varied – the default is the recipient’s location if they are registered, otherwise the supplier’s, with a long list of specific exceptions for immovable property, events, transport, telecom and more.
Fixing it later is genuinely painful: you cannot simply convert CGST-SGST into IGST. It means a refund claim on one side and a fresh payment on the other, with interest running in the meantime.
Worked example
The invoice that had to be unwound
| Bhopal consultant bills a Pune company | Place of supply: Maharashtra | IGST was correct |
| Invoice raised with CGST + SGST | ₹1,80,000 charged wrongly | Client cannot claim it |
| Correction | Refund claim in MP, fresh IGST payment | Interest accrues in between |
The total tax was right. The pockets were wrong – and that took a refund claim, a fresh payment and months to fix. Place of supply is worth getting right at invoice stage, every time.
The mistakes that cost people money
Not theoretical risks — the ones we actually see land on clients’ desks.
Using the billing address instead of the place of supply. They are often the same, and when they differ, the law follows the place of supply.
Applying the general rule to services with a specific rule – immovable property, events, training and transport all have their own.
Assuming an export of services qualifies as zero-rated without checking every condition, including receipt in convertible foreign exchange.
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Interstate Supply & Place of Supply — the complete guide
10 pages covering all 27 provisions, with the plain-language explanation and practice notes for each. Print it, keep it, share it with your accountant.
Every provision on interstate supply & place of supply
All 27 of them, each with a plain-language explanation and the full legal text.
IGST Act, 2017 · 27
Reading is free. Getting it wrong isn’t.
Stuck on interstate supply & place of supply for your own business?
You now know more about this than most people who will advise you on it. If the numbers are big enough that being wrong matters, send us the facts – we will tell you where you stand before you commit to anything.
6+ years · 2,500+ GST registrations filed · Bhopal, serving all of India