Guides · GST
Place of supply for goods
The place of supply for goods is the rule that fixes where a sale of goods happens for GST. It is what decides whether the supply is intra-state or inter-state — and therefore whether you charge CGST and SGST or IGST.
How the place of supply is worked out
For goods that move, the place of supply is generally where the movement ends for delivery to the recipient. For goods that are not moved — handed over as they stand — it is generally the location of the goods at the time of delivery. There are specific rules for other cases, such as goods supplied on board a conveyance.
The point of the rule is to pin the transaction to a state, because that is what the tax split depends on.
Why it drives the tax
Once the place of supply is fixed, the split follows: same state as the supplier means CGST and SGST; a different state means IGST. Getting the place of supply wrong means charging the wrong tax head, which then has to be corrected because credit is claimed head by head.
This is where a bill-to and ship-to difference can trip a business up, so the place of supply has to be decided on the facts, not assumed from the billing address.
How Lekha applies the place of supply
Lekha generates GST-compliant delivery challans and tax invoices against a purchase order, with HSN, place of supply, and the right CGST/SGST or IGST split computed live, and gap-free financial-year numbering.
By reading the place of supply on each document, Lekha applies the correct CGST/SGST or IGST split without you deciding it by hand on every bill.
Questions
- What decides the place of supply for goods?
- Generally, where the movement of the goods ends for delivery to the recipient; for goods that are not moved, where they are located at the time of delivery, with specific rules for particular cases.
- Why does the place of supply matter for goods?
- It decides whether the supply is intra-state or inter-state, which sets whether you charge CGST and SGST or IGST.
- Does the billing address decide the place of supply?
- Not by itself. The place of supply follows the rules for where the goods are delivered or located, which can differ from the billing address.
This guide is general information, not legal or tax advice. Confirm the current rules and your own circumstances for any specific case.