Understanding Place of Supply of Goods under GST – A Practical Guide (Sec 10 & 11 of IGST Act)

Author: CA Devesh Thakur
Category: GST Basics | 30 Days GST Challenge – Day 5

Introduction

The concept of Place of Supply plays a crucial role in determining whether a supply is inter-state or intra-state, which further affects whether IGST or CGST & SGST will be levied. For goods, this is governed by Sections 10 and 11 of the IGST Act.

Let’s decode these sections with practical illustrations.

PDF Notes Day 5

Applicable Provisions: Sec 10 & Sec 11 of IGST Act

Section 10 – When the supply of goods is within India

This section applies when both supplier and recipient are located in India.

Section 11 – When the supply of goods involves import/export

This section deals with supplies where either the supplier or recipient is located outside India.

Section 10 – Detailed Scenarios and Examples

Movement of Goods by Supplier, Recipient or Other Person

Provision:
If the supply involves movement of goods (by the supplier, recipient, or any other person), the place of supply is the location where movement terminates for delivery.

Example:

• Supplier (S) in Delhi sends goods to recipient (R) in Agra.
• Movement terminates in Agra.
   Place of Supply: Agra (Uttar Pradesh)
   Inter-State Supply – IGST Applicable

 “Bill To – Ship To” Scenario

Provision:
When goods are delivered by the supplier to a third person on the direction of the buyer (deemed recipient), the place of supply is the location of the person who gave the direction.

Example:

• Buyer (3rd Person) in Kerala instructs Seller (S) in Haryana to deliver goods directly to another recipient (R) in Delhi.
• Though goods are delivered to Delhi, they are billed to Kerala.
  Place of Supply: Kerala
  Deemed that 3rd person has received the goods

No Movement of Goods

Provision:
When there is no movement of goods, the place of supply is the location of the goods at the time of delivery.

Example:

• Goods picked up by buyer from a retail store in Delhi.
  Place of Supply: Delhi
  Intra-State Supply – CGST + SGST Applicable

Goods Installed or Assembled at Site

Provision:
If goods are supplied and are to be installed or assembled at a site, the place of supply is the place of installation/assembly.

Example:

• Machinery sent from Kerala and installed in Gujarat.
  Place of Supply: Gujarat
  Tax determined based on location of installation

Goods Supplied on Board a Conveyance

Provision:
Where goods are supplied on board a conveyance (e.g. train, aircraft, vessel), the place of supply is the location at which such goods are taken on board.

Example:

• Goods supplied on Vande Bharat train while boarding in Delhi.
  Place of Supply: Delhi

Section 11 – Import and Export of Goods

Goods Imported into India

Provision:
Place of supply for imports is the location of the importer.

Example:

• Goods imported by a company in Mumbai.
  Place of Supply: Mumbai

Goods Exported from India

Provision:
Place of supply for exports is outside India, but for GST compliance, it is deemed to be the location outside India.

Example:

• Goods exported from Delhi to the USA.
   Place of Supply: USA (outside India)
   Export – Zero-Rated Supply

Summary

Conclusion

Understanding the Place of Supply is key to determining the correct GST liability. Whether you’re a trader, manufacturer, or a service provider dealing in goods, a correct classification under Section 10 or 11 of the IGST Act can ensure compliance and smooth business operations.