Glossary

Place of supply

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The state where a supply is treated as made for GST, which decides whether CGST and SGST or IGST applies.

Place of supply is the rule that decides which state a sale belongs to for GST. Compare it with the supplier's location: if both are in the same state, the invoice carries CGST and SGST; if they are in different states, it carries IGST.

The main rules

The rules are in sections 10 to 13 of the IGST Act.

Goods that move: the place where the movement ends for delivery. Tiles sent from Morbi to a dealer in Jaipur have Rajasthan as the place of supply.
Goods that do not move: where they are when handed over.
Services to a registered business: generally the buyer's registered location.
Services to an unregistered buyer: the buyer's address on record, or else the supplier's location.
Special cases: services linked to property, events, restaurants and transport have their own rules.

On the invoice

For an inter-state sale the invoice must show the place of supply with the name of the state. For exports the place of supply is outside India, and the GST system uses code 96 for a foreign country.

A wrong place of supply puts the tax in the wrong head. Tax paid as CGST and SGST when IGST was due cannot be moved: it is refunded and the right tax paid again, so it is worth getting right on the first invoice.

Nearby terms

All 60 terms

PANThe 10-character income tax number issued to every taxpayer, which also forms the middle of a GSTIN.PayablesMoney the business owes its suppliers for goods or services already received, also called creditors.Petty cashA small float of cash kept for day-to-day expenses such as tea, courier, local transport and small repairs.Profit and loss statementThe statement of income and expenses for a period, which shows whether the business made a profit.Purchase orderThe buyer's written order to a supplier, with items, quantities, rates, delivery date and payment terms.Receipt voucherThe document issued when an advance is received, as required under GST, before any invoice exists.

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