Whatisplaceofsupply?
It is one line on the invoice, it is frequently left blank, and it silently determines which government receives your tax.
6 minute read · Updated
Short answer
Place of supply is the location where a supply is treated as being made, and it decides whether GST splits into CGST and SGST or is charged as a single IGST line. If the place of supply is in your own state, the supply is intra-state and the rate splits in half. If it is in another state or union territory, the supply is inter-state and the whole rate is charged as IGST. It is determined by rules — generally the recipient's registered location for B2B services, and the delivery destination for goods — not by where you are sitting when you raise the invoice.
The rule in one table
| Place of supply is | Supply is | You charge |
|---|---|---|
| In your own state | Intra-state | CGST + SGST, half each |
| In another state or UT | Inter-state | IGST, one line |
| Outside India | Export | Zero-rated, with an endorsement |
The customer pays the same total in the first two cases. What changes is which government receives it, which is why the field exists and why an error has to be corrected rather than ignored.
How it is actually determined
The two cases that cover most invoices:
Generally where the goods are delivered — the destination, not where they were despatched from.
Generally the recipient's registered location. If your client is registered in Karnataka, that is normally the place of supply even if the work was performed in Kolkata.
There is then a long list of specific situations with their own rules — immovable property, events, transport, telecom, restaurant and accommodation services among them — where the answer is the location of the property, the venue or the performance rather than the recipient's registration.
If your work touches any of those categories, the general rule above is the wrong one to rely on. This page describes the shape of the concept so the field on your invoice means something to you — it is not a determination of your position, which is your accountant's.
The mistake almost everyone makes once
Charging CGST and SGST because the client is physically nearby, or because you always have, when their registration is in another state. A Kolkata studio doing work for a client whose GSTIN is Karnataka is normally making an inter-state supply, however local the meetings felt.
It matters because your customer's credit follows the tax you charged. Charge the wrong heads and they cannot claim what you collected, so the invoice comes back — usually weeks later, from their accountant rather than your contact.
The reference
GST invoice format
The fields a GST tax invoice must carry under Rule 46, when to split the rate into CGST and SGST instead of IGST, and how long you have to issue one.
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Questions people ask
Compare the place of supply with your own state. Same state means intra-state, and the rate splits into CGST and SGST. A different state or union territory means inter-state, and the whole rate is charged as a single IGST line. For B2B services the place of supply is generally the recipient's registered location, not where the work was done.
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