Place of Supply Under GST: IGST vs CGST/SGST on Services

Every GST-registered service provider needs to answer one critical question before raising an invoice: is this an inter-state supply or an intra-state supply? The answer determines whether you charge IGST or CGST plus SGST (or UTGST in Union Territories).

WHY PLACE OF SUPPLY MATTERS
Under GST, if the location of the supplier and the place of supply are in the same state or Union Territory, it is generally an intra-state supply attracting CGST and SGST. If they are in different states, it is an inter-state supply attracting IGST. Supplies to or by SEZ units are always treated as inter-state regardless of location.

THE GENERAL RULE: SECTION 12(2) OF THE IGST ACT
The default rule under Section 12(2) depends on whether the recipient is registered:

B2B (registered recipient): The place of supply is the location of the recipient as recorded in their GST registration.
B2C (unregistered recipient): The place of supply is the location of the recipient where the address is on record, and if not available, the location of the supplier.

A chartered accountant in Mumbai providing advisory services to a registered client in Delhi charges IGST. The same service to a walk-in unregistered client in Mumbai attracts CGST plus SGST.

KEY EXCEPTIONS
Immovable property related services (Section 12(3)): Services like construction, architecture, interior design are taxed where the immovable property is located.

Restaurant and catering services (Section 12(4)): Place of supply is where the services are actually performed.

Training and performance appraisal (Section 12(5)): For registered person, location of recipient. For unregistered, where services are performed.

Admission to events (Section 12(6)) and event organisation (Section 12(7)): Admission follows where the event is held. Organisation for registered person uses recipient location, for unregistered uses event location.

COMMON MISTAKE TO AVOID
Many service providers default to charging CGST plus SGST on all invoices, assuming their own location determines the tax. Under Section 12(2), B2B supplies follow the recipient location. Always identify your service category first and check the specific sub-section.

PRACTICAL TIP
Always capture your client s GSTIN before invoicing. The state code in the first two digits of the GSTIN instantly tells you the recipient s state. Compare with your own state code. If different and the general rule applies, charge IGST.