IGST Section 10 — Place of supply of goods other than supply of goods imported into, or exported from Ind
IGST Act · Place of supply of goods other than supply of goods imported into, or exported from Ind
Quick Answer
Section 10 of the IGST Act, 2017 governs Place of supply of goods other than supply of goods imported into, or exported from Ind. It provides the core statutory basis, outlining the essential legal principles, rights, and liabilities under Indian indirect tax law. Section 10 IGST: Place of supply of goods other than supply of goods — eligibility, conditions, case laws and compliance impact under Indian tax law.
Plain-English Explanation
Section 10 of the IGST Act, 2017, lays down the rules for determining the place of supply for goods in situations other than import or export transactions. Determining the place of supply is crucial because it dictates which state's GST (CGST, SGST, or IGST) will be applicable to the transaction.
This section applies to all suppliers and recipients of goods involved in transactions within India, excluding those related to imports into India or exports out of India. This includes manufacturers, wholesalers, retailers, service providers who supply goods as part of their service, and any other business or individual engaged in the supply of goods within the country. The rules are applied when the goods are physically located and transacted within India. The section is used for inter-state transactions. If the supplier and the place of supply are in the same state, the CGST/SGST laws will determine which tax applies.
Here's a breakdown of the key conditions and exceptions within Section 10:
- Movement of Goods (Section 10(1)(a)): If the supply involves the movement of goods (whether by the supplier, recipient, or a third party), the place of supply is the location where the movement of goods terminates for delivery to the recipient.
- Example: A company in Mumbai sends goods by truck to a customer in Chennai. The place of supply is Chennai, Tamil Nadu. Therefore, IGST would apply.
- Bill-to-Ship-to (Section 10(1)(b)): If goods are delivered to a recipient or another person on the direction of a third person (the "bill-to" party), the place of supply is the principal place of business of that third person. This covers scenarios where one entity instructs the supplier to deliver goods directly to its customer.
- Example: Company A in Delhi orders goods from a supplier in Gujarat but instructs the supplier to deliver the goods directly to Company B (A's customer) in Maharashtra. The place of supply is Delhi (where Company A's principal place of business is), so IGST would apply.
- No Movement of Goods (Section 10(1)(c)): If the supply doesn't involve the movement of goods, the place of supply is the location of the goods at the time of delivery to the recipient. This is relevant for transactions involving goods that are already located at the recipient's premises or a specific location.
- Example: A machine is sold "as is" at a factory in Haryana. The buyer is from Punjab and takes possession of the machine at the Haryana factory. The place of supply is Haryana. Therefore, IGST would apply.
- Supply to Unregistered Persons (Section 10(1)(ca)): This clause, inserted by amendment in 2023, addresses supplies made to unregistered persons (those without a GST registration). In this case, the place of supply is:
- The location as per the address recorded in the invoice if the address is recorded. Critically, recording the state name is considered sufficient for recording the address for this purpose.
- If the address is not recorded in the invoice, the place of supply defaults to the location of the supplier.
- Example: A shop in Karnataka sells a product to a customer from Kerala who is not registered under GST. The invoice includes the customer's address in Kerala. The place of supply is Kerala. If the invoice does not contain the customer's address, the place of supply is Karnataka.
- Goods Assembled or Installed at Site (Section 10(1)(d)): If the goods are assembled or installed at a site, the place of supply is the place of installation or assembly.
- Example: A company in Rajasthan supplies machinery to a customer in West Bengal. The company also assembles the machinery at the customer's factory in West Bengal. The place of supply is West Bengal.
- Goods Supplied On Board a Conveyance (Section 10(1)(e)): If goods are supplied on board a conveyance (vessel, aircraft, train, or motor vehicle), the place of supply is the location where the goods are taken on board.
- Example: Snacks are loaded onto a train in Delhi for sale during the journey. The place of supply for those snacks is Delhi.
Undeterminable Place of Supply (Section 10(2)): If the place of supply cannot be determined using the above rules, it will be determined in the manner prescribed in the GST Rules. This provides a fallback mechanism for unusual or complex transactions.
The 2023 amendment adding clause (ca) is particularly important for businesses dealing with unregistered persons, as it shifts the focus to the address recorded in the invoice. Businesses must ensure they accurately record customer addresses in invoices to correctly determine the place of supply and avoid GST compliance issues.
No case laws found for this section yet.
Browse all case laws →Frequently Asked Questions
What is the primary rule for determining the place of supply under IGST Section 10(1)(a) when the supply involves movement of goods?
Under Section 10(1)(a) of the IGST Act, where the supply involves movement of goods, whether by the supplier or the recipient or by any other person, the place of supply of such goods is the location at which the goods are at the time at which the movement of goods terminates for delivery to the recipient.
How is the place of supply determined under IGST Section 10(1)(b) when the goods are delivered by the supplier to the recipient or any other person on the direction of a third person, before or during the movement of goods?
Section 10(1)(b) states that if the goods are delivered by the supplier to a recipient (or another person) on the direction of a third person, the place of supply is the principal place of business of such third person. This is often referred to as 'bill to ship to' scenario.
What if the goods are installed or assembled at a site as part of the supply? How does Section 10(1)(c) determine the place of supply?
If the supply involves installation or assembly of goods at a site, Section 10(1)(c) stipulates that the place of supply is the location where such installation or assembly takes place.
How does IGST Section 10 handle the place of supply for goods supplied on board a conveyance, such as a train, aircraft, or vessel (Section 10(1)(d))?
In the case of goods supplied on board a conveyance (e.g., train, aircraft, vessel), Section 10(1)(d) designates the place of supply as the location where the goods are taken on board.
When none of the specific scenarios in Section 10(1)(a) to (d) apply, how is the place of supply determined under Section 10(1)(e)?
Section 10(1)(e) acts as a residual clause. If none of the conditions specified in clauses (a), (b), (c) and (d) of sub-section (1) apply, the place of supply of goods will be the location of the supplier of goods.
Could you provide a practical example of how IGST Section 10(1)(b) (bill-to-ship-to) works? Suppose Company A in Delhi asks Company B in Mumbai to ship goods directly to Company C in Chennai. What is the place of supply?
In this scenario, the place of supply is Delhi, which is the principal place of business of Company A (the third person giving the direction). Company B (Mumbai) is supplying to Company A (Delhi), even though the goods are physically delivered to Chennai (Company C).
Are there any specific exemptions or notifications that can alter the place of supply determination under IGST Section 10? What should businesses keep in mind?
Yes, businesses should always be aware of any notifications or exemptions issued by the government that might impact the place of supply. These notifications can sometimes modify the rules outlined in Section 10 for specific goods or situations. Regularly checking for updates from the CBIC (Central Board of Indirect Taxes and Customs) is crucial for compliance.
Key Conditions & Requirements
| Condition | Details |
|---|---|
| Supply involves movement of goods | The place of supply is the location of the goods when the movement terminates for delivery to the recipient, regardless of who moves the goods. |
| Goods delivered on the direction of a third person (Bill-to-Ship-to) | The third person is deemed to have received the goods, and the place of supply is their principal place of business. |
| Supply does not involve movement of goods | The place of supply is the location of the goods at the time of delivery to the recipient. |
| Supply to an unregistered person | Place of supply shall be the address recorded in the invoice. If the address is not recorded in the invoice, the place of supply will be the location of the supplier. Recording of the State is deemed recording of the address. |
| Goods are assembled or installed at site | The place of supply is the location of the installation or assembly. |
| Goods supplied on board a conveyance | The place of supply is the location where the goods are taken on board the conveyance. |
| Place of supply cannot be determined otherwise | The place of supply shall be determined in the manner prescribed. |
No related notifications found for this section.
Browse all notifications →Amendment History
Substituted for "at such rate as may be notified by the Government on the recommendations of the Council" by s. 5 of The Central Goods and Services Tax (Amendment) Act, 2018 (No. 31 of 2018) - Brought into force w.e.f. 01st February, 2019.
Substituted for "one crore rupees" by s. 5 of The Central Goods and Services Tax (Amendment) Act, 2018 (No. 31 of 2018) - Brought into force w.e.f. 01st February, 2019.
Inserted by s. 5 of The Central Goods and Services Tax (Amendment) Act, 2018 (No. 31 of 2018) - Brought into force w.e.f. 01st February, 2019.
Inserted by s. 93 of The Finance (No. 2) Act, 2019 (No. 23 of 2019) - Brought into force w.e.f. 01st January, 2020 vide Notification No. 1/2020-C.T. , dated 01st January, 2020.
Substituted for "(a) he is not engaged in the supply of services other than supplies referred to in clause (b) of paragraph 6 of Schedule II save as provided in sub-section (1), he is not engaged in the supply of services." by s. 5 of The Central Goods and Services Tax (Amendment) Act, 2018 (No. 31 of 2018) - Brought into force w.e.f. 01st February, 2019.
Inserted by s. 119 of The Finance Act, 2020 (No. 12 of 2020) - Brought into force w.e.f. 01st January, 2021 vide Notification No. 92/2020-C.T. dated 22nd December, 2020.
Inserted by s. 119 of The Finance Act, 2020 (No. 12 of 2020) - Brought into force w.e.f. 01st January, 2021 vide Notification No. 92/2020-C.T. dated 22nd December, 2020.
Inserted by s. 119 of The Finance Act, 2020 (No. 12 of 2020) - Brought into force w.e.f. 01st January, 2021 vide Notification No. 92/2020-C.T. dated 22nd December, 2020.
Omitted "and" by s. 93 of The Finance (No. 2) Act, 2019 (No. 23 of 2019) - Brought into force w.e.f. 01st January, 2020 vide Notification No. 1/2020-C.T. , dated 01st January, 2020.
Substituted for - "Council" by s. 93 of The Finance (No. 2) Act, 2019 (No. 23 of 2019) - Brought into force w.e.f. 01st January, 2020 vide Notification No. 1/2020-C.T. , dated 01st January, 2020.
Inserted by s. 93 of The Finance (No. 2) Act, 2019 (No. 23 of 2019) - Brought into force w.e.f. 01st January, 2020 vide Notification No. 1/2020-C.T. , dated 01st January, 2020.
Omitted "goods or" by s. 137 of The Finance (No. 8) Act, 2023 (No. 08 of 2023) - Brought into force w.e.f. 01st October, 2023 vide Notification No. 28/2023-C.T. , dated 31st July, 2023 .
Omitted "goods or" by s. 137 of The Finance (No. 8) Act, 2023 (No. 08 of 2023) - Brought into force w.e.f. 01st October, 2023 vide Notification No. 28/2023-C.T. , dated 31st July, 2023 .