GST place of supply of services: the default rule, and the ten exceptions that override it

Why place of supply decides the tax

Place of supply is not a reporting field. It decides whether the transaction is inter-State or intra-State, and therefore whether the invoice carries IGST or CGST with SGST. Get it wrong and the tax paid is the wrong tax, which is a harder problem than short payment.

The rules sit in the IGST Act in two blocks. Section 12 applies where the location of the supplier and the location of the recipient are both in India. Section 13 applies where one of them is outside India.

The default rule in section 12(2)

Section 12(2) opens with an exclusion: it applies except to the services specified in the sub-sections that follow. Within that space:

For business-to-business work the practical consequence is that the recipient's GSTIN State drives the tax. For a retail service with no address captured, the supplier's own location applies, which is why address capture at the point of sale matters.

The overrides that beat the default

The specific sub-sections cover the cases where a physical fact matters more than who paid. These are the ones that decide most disputes.

The training and event rules show the pattern the Act repeats: for a registered recipient the location wins, for anyone else the physical fact wins. That split is worth memorising, because it resolves a lot of cases without reading further.

Transportation of goods sits in section 12(8), and the current CBIC text shows that sub-section as omitted with effect from October 2023. Read the section as it currently stands rather than a cached commentary, because a goods-transport call made on the old proviso may no longer hold.

When one party is outside India

Section 13 applies where the supplier or the recipient is outside India. The default in section 13(2) is the location of the recipient, with a proviso sending it to the supplier's location where the recipient's location is not available in the ordinary course of business.

The exceptions run from sub-section (3) to (13). The important ones:

• Services on goods made physically available by the recipient, or requiring the physical presence of the recipient, are taxed where performed. A repair carve-out excludes goods temporarily imported for repair or treatment and exported after.
• Immovable property services follow the property. Events follow the venue.
• Where such a service is supplied at more than one location including one in the taxable territory, the taxable-territory location governs.
• Banking services to account holders, and short hiring of means of transport up to a month, are at the supplier's location.
• Online information and database access or retrieval services are at the recipient's location, with a seven-condition test for deciding that the recipient is in the taxable territory when any two are met.

Section 13(9) and part of section 13(8) show as omitted in the current text. That is another reason to read the section on CBIC rather than a summary written before those amendments.

How to confirm on official pages

1. Read section 12 on CBIC and find the sub-section that names your service before applying 12(2).
2. For a cross-border supply, read section 13 on CBIC, including the footnotes marking omitted sub-sections.
3. Where the classification is genuinely contested, check for a CBIC circular on that service before taking a position.

Where Complied AI fits

The structure is stable but the sub-sections have been amended and omitted, and circulars clarify the hard cases. CBIC and GST updates on Complied AI keep those beside section 12, so an invoice decision reads the current sub-section rather than a training note.