Place of Supply of Goods under GST

• 5 categories of specific guidelines have been enacted under Section 10 of IGST Act for determining the place of supply rules:
  • Supplies involving movement of goods
  • Supplies not involving movement of goods
  • Supplies made on direction of third parties
  • Goods assembled or installed at site
  • Supplies made on board a conveyance
• Government is empowered to prescribe method for determination of place of supply if a particular situation is not adequately covered by the afore-mentioned 5 categories. However, assessing officers have no authority to deviate from the provisions contained in Section 10 and apply their own methods unless Government prescribes a particular method.
• Supplies involving movement of goods [Section 10(1)(a) of the IGST Act]:
  • Place of supply is the location of the goods at the time at which the movement of goods terminates for delivery to the recipient. Simply put, the place of supply is the place of delivery to the recipient.
  • Movement can either be by the supplier, or the recipient or by any other person.
• Supplies not involving movement of goods [Section 10(1)(c) of the IGST Act]:
  • Place of supply is the location of the goods at the time of delivery to the recipient. Here again, the place of delivery is ultimately the place of supply.
  • This kind of supply does not involve any movement, either by the supplier or by the recipient.
• Supplies made on directions of third parties [Section 10(1) (b) of the IGST Act]:
  • This category includes “Bill to-Ship to” transactions. The place of supply is the principal place of business of the party giving directions for making the supply of goods to a completely different person, that is, the principal place of business of the “bill to” party.
  • Thus, delivery of goods must take place on directions of a third person. The person who takes the delivery of goods and the third person who gives directions cannot be the same.
  • Goods must be delivered either to:
    • Recipient
    • Any other person
  • The third person who is giving directions for delivery may be an agent or may give directions in some other capacity.
  • Directions themselves may be given through transfer of documents of title to the goods or through some other medium.
  • Directions may be given before or during the movement of goods.
  • There is a fiction which deems that the person giving the directions has received the goods, though he has not taken actual delivery of the goods.
• Goods assembled or installed at site [Section 10(1)(d) of the IGST Act]:
  • Place of supply is the place of assembly or installation.
• Goods supplied on board a conveyance [Section 10(1)(e) of the IGST Act]:
  • Place of supply is the location at which goods are taken on board
  • Conveyance includes a vessel, an aircraft, a train or a motor vehicle.