Place of Supply of Goods

GST is a destination-based tax, meaning that goods and services are taxed at the place where they are consumed rather than where they originate. In other words, the state in which consumption takes place holds the right to collect GST.

1. Place of Supply When There Is Movement of Goods

When goods are physically moved, the termination point of the movement (i.e., the delivery destination) is crucial. Below are the details:

Supply Type	Place of Supply
Goods moved by supplier, buyer, or third party for delivery	Location where movement terminates
Goods delivered on instructions of a third party via title transfer/documentation	Principal place of business of that third party

Examples:
Example 1 – Intra-State Sales: Mr. Raj of Mumbai sells 10 TV sets to Mr. Vijay in Nagpur (both in Maharashtra).
Place of Supply: Nagpur, Maharashtra. GST: CGST and SGST applicable.

Example 2 – Inter-State Sales: Mr. Raj of Mumbai sells 30 TV sets to Mr. Vinod in Bangalore (Karnataka).
Place of Supply: Bangalore, Karnataka. GST: IGST is charged.

Example 3 – Delivery to a Third Party as Per Instructions: Anand in Lucknow orders goods from Mr. Raj in Mumbai with delivery instructed to Nagpur (Maharashtra).
Place of Supply: Lucknow (UP). GST: IGST is applicable.

Example 4 – Receiver Collects Goods from Ex-Factory: Mr. Raj supplies 100 TV sets to Sales Heaven Ltd. of Chennai, which collects them from his ex-factory.
Place of Supply: Chennai, Tamil Nadu. GST: IGST applies.

Example 5 – E-commerce Sale: Mr. Raj orders a mobile from an online seller who processes the order, even if the delivery address differs.
Place of Supply: Determined by the goods’ movement termination; typically IGST is charged.

2. Place of Supply – No Movement of Goods

When there is no physical movement of goods, the place of supply is determined by the location where the goods are at the time of delivery (ownership transfer) or where assembly/installation occurs.

Example 1 – No Movement of Goods: Sales Heaven Ltd. in Chennai opens a new showroom in Bangalore and purchases a building with pre-installed workstations.
Place of Supply: Bangalore. GST: CGST and SGST applicable (Note: GST is not charged on building purchases).

Example 2 – Installation of Goods:
Strong Iron & Steel Ltd. (Jharkhand) engages M/s SAAS Constructions (West Bengal) to build a blast furnace at its steel plant in Jharkhand.
Place of Supply: Jharkhand
GST: CGST and SGST apply
Note: M/s SAAS must register in Jharkhand (they can opt to register as a casual taxable person for up to 90 days, extendable by another 90 days on reasonable cause).

Table: Assembly/Installation Scenario Comparison

Particulars	Location of Supplier	Location of Recipient (Registered Office)	Site of Assembly/Installation	Place of Supply	GST Charged
Scenario 1	West Bengal	Orissa	Jharkhand	Jharkhand	CGST + SGST (Jharkhand)
Scenario 2	Jharkhand	Jharkhand	Jharkhand	Jharkhand	CGST + SGST (Jharkhand)
Scenario 3	Jharkhand	Jharkhand	Orissa	Orissa	CGST + SGST (Orissa)
Scenario 4	Jharkhand	Jharkhand	Tamil Nadu	Tamil Nadu	CGST + SGST (Tamil Nadu)
Scenario 5	Jharkhand	Tamil Nadu	Jharkhand	Jharkhand	CGST + SGST (Jharkhand)

3. Place of Supply – Goods Supplied on a Vessel/Conveyance

For goods supplied on board a conveyance (vessel, train, aircraft, or motor vehicle), the place of supply is determined by the location where the goods are taken on board.

Supply Type	Place of Supply
Goods loaded on a conveyance	Location where goods are taken on board

Examples:
Example 1 – Air Travel: Mr. Ajay travels from Mumbai to Delhi and purchases onboard snacks.
Place of Supply: Mumbai. GST: CGST and SGST as goods were loaded in Mumbai.

Example 2 – Business Travel by Air: On a business trip from Mumbai to Chennai, Mr. Ajay purchases lunch onboard.
Place of Supply: Mumbai. GST: CGST and SGST apply.

Example 3 – Train Journey: Mr. Vinod, traveling to Mumbai, buys lunch at Vadodara where the goods were loaded in Delhi.
Place of Supply: Delhi. GST: CGST and UTGST apply.

4. Place of Supply – Imports and Exports

For goods imported into or exported from India, the place of supply is determined as follows:

Supply Type	Place of Supply	GST
Goods imported into India	Location of the importer	IGST is charged
Goods exported from India	Location outside India	Exports are zero-rated (eligible for refund)

Note on Invoicing in Foreign Currency: When issuing an invoice in a foreign currency, GST may be charged in that currency. The invoice must also display the conversion rate and corresponding INR values.

Examples:
Example 1 – Import: Ms. Malini in Mumbai imports school bags from China.
Place of Supply: Mumbai. GST: IGST applies.

Example 2 – Export: Ms. Anita in Kolkata exports Indian perfumes to the UK.
Place of Supply: UK. GST: Exports are zero-rated.

5. When Place of Supply Cannot Be Determined

If the place of supply cannot be determined for any reason, the determination will be made in accordance with the rules established by Parliament based on the recommendations of the GST Council.

This comprehensive guide on the place of supply of goods under GST illustrates how tax liability is determined across various scenarios—from physical movement and no movement, to conveyance and cross-border transactions. For further assistance or clarification on GST compliance, please feel free to reach out.