GST Place of Supply: Goods Sold On Board Conveyance

1. Introduction

When we think of buying goods, we usually imagine a shop, warehouse, or delivery point. But under GST, supplies can happen anywhere — even on a train, an airplane, or a ship while it’s moving between states!

So how does GST decide where the tax applies when goods are sold during travel? That’s where Section 10(1)(e) of the Integrated Goods and Services Tax (IGST) Act, 2017 comes in.

This section covers the “place of supply for goods supplied on board a conveyance” — such as during journeys by train, aircraft, vessel, or motor vehicle.

2. What Does Section 10(1)(e) Say?

According to the law:

This means GST looks at where the goods were first loaded or taken on board the conveyance — not where they were sold or where the passenger consumed them.

In other words:

👉 The journey doesn’t matter — what matters is the starting point of supply.

3. Meaning of “On Board a Conveyance”

The term conveyance under GST refers to any mode of transport used for carrying goods or passengers — such as trains, aircraft, ships, or even buses.

So when a seller provides goods (like food, beverages, magazines, or merchandise) while passengers are traveling, that transaction is treated as a supply made on board a conveyance.

4. Why This Rule Exists

This rule was created to avoid tax confusion between multiple States when sales happen during movement.

For example, if a train starts from Delhi and passes through Rajasthan, Gujarat, and Maharashtra — and a vendor sells snacks in all those States — each one might claim the GST share.

Section 10(1)(e) prevents that by fixing a single place of supply — the point where goods were first loaded on board. That State gets the tax, regardless of where passengers buy or consume the goods.

5. Key Features of Section 10(1)(e)

• It applies only to goods supplied during travel — not before or after boarding.
• It covers vessels, aircraft, trains, and motor vehicles.
• The place of supply = location where goods were taken on board.
• Applies even if goods are sold across multiple States during the journey.
• The supplier must determine and record where loading occurred.

6. Examples and Practice

Let’s understand this rule through simple examples that mirror real-world cases.

Example 1 – Goods Supplied on a Train

Mr. X boards a train from New Delhi to Kota (Rajasthan). He sells snack boxes and beverages to passengers after the train departs.

• Place of Supply = New Delhi, because that’s where the goods were taken on board before the journey started.
• Even if sales happen while the train crosses Rajasthan, Delhi remains the place of supply.

Type of Tax: Since the supplier’s location and place of supply are both in Delhi → Intra-State supply (CGST + SGST).

Example 2 – Catering in an Aircraft

A catering contractor loads meals onto a flight from Mumbai to Chennai. The meals are served while the aircraft is in airspace over Karnataka.

• Place of Supply = Mumbai, Maharashtra (place of loading).
• Tax Type = Intra-State (CGST + SGST) if caterer is registered in Maharashtra.

Even though passengers eat the meals mid-flight, GST belongs to Maharashtra because the goods were boarded there.

Example 3 – Goods Supplied on a Ship

A cruise vessel departs from Cochin (Kerala) and travels to Lakshadweep Islands. Gift shops on board sell souvenirs to passengers during the journey.

• Place of Supply = Cochin, Kerala, since that’s where goods were stocked and taken on board.
• If the ship restocks mid-journey at another port, the new loading point becomes the next PoS for those goods.

Example 4 – Bus Journey Across States

A long-route bus from Hyderabad (Telangana) to Bengaluru (Karnataka) sells packaged water and snacks.

• Goods were loaded in Hyderabad → Place of Supply = Telangana.
• GST collected and remitted in Telangana even if sales occurred later in Karnataka.

7. Why Point of Loading Matters

The law fixes the place of supply at the point of loading (taking on board) because:

• It’s easier to track and verify from supplier records.
• It prevents multiple tax claims by different States during travel.
• It ensures uniform compliance — one PoS per batch of goods loaded.

8. How This Works in Business Practice

• Railways & Catering: - IRCTC or private caterers record the point where the train departs and where goods are loaded. That becomes the GST location.
• Airlines: - Food and duty-free items loaded at Mumbai airport are taxed under Maharashtra GST, even if sold mid-flight to Chennai passengers.
• Cruises & Vessels: - Goods stocked at Cochin port attract Kerala GST. When replenished at Goa port, new batches attract Goa GST.

9. Goods vs. Services on Board

Section 10(1)(e) applies only to goods, not services. If a service (like entertainment, catering, or Wi-Fi) is provided on board, Section 12(10) governs it, not Section 10.

So, always distinguish between supplying food as goods vs serving food as a service.

10. Documentation and Compliance

Suppliers dealing in such sales must maintain clear records:

Invoice or cash memo mentioning:

• Journey route
• Vehicle/train/flight number
• Location of loading (PoS)

✅ E-way bill (if applicable) showing loading point as dispatch location.

✅ Stock registers showing quantity of goods loaded and sold per journey.

These records prove the correct PoS during GST audits.

11. Clarifications and Recent Updates (2024–25)

So even mobile vendors and airline caterers must ensure the State code of loading appears on invoices.

12. Common Errors to Avoid

• Recording passenger destination as place of supply.
• Failing to record loading location on invoice.
• Treating on-board goods as catering service (wrong classification).
• Using one consolidated PoS for multiple routes.
• Ignoring new e-invoicing PoS field for mobile sales.

Each of these errors can cause mismatches in GSTR-1 and scrutiny from tax officers.

13. Special Situations

(a) Multiple Loading Points

If goods are loaded at multiple stations or airports during a trip, each loading point has its own place of supply. Separate invoice series or reports should track batches accordingly.

(b) Return Journeys

For return trips, goods freshly loaded at the return origin count as new supplies under that State’s jurisdiction.

(c) Interstate Bus Fleets or Rail Pantry Contractors

Contractors with multi-State operations may need separate GST registrations per State if they load and supply goods from different locations regularly.

14. Practical Checklist for Vendors

• Determine and record the loading point before departure.
• Mention “PoS – (State name)” clearly on every invoice.
• For e-invoicing, ensure proper State code field is filled.
• Maintain daily loading and sales log per conveyance.
• If operating in multiple States, evaluate need for additional GST registrations.

15. Difference Between Section 10(1)(e) and Other Rules

16. Case Study: Train Pantry Supply

Scenario: Fast Meals Catering Ltd., registered in Delhi, operates pantry cars for trains departing from Delhi to Mumbai.

• Goods (snacks, beverages) are loaded at New Delhi Railway Station.
• Sales occur all the way to Mumbai.

✅ Place of Supply = Delhi.

✅ Tax Type = CGST + SGST (since supplier also registered in Delhi).

If the same vendor loads goods at Mumbai for the return trip, PoS = Maharashtra for that leg.

This system ensures that both Delhi and Maharashtra receive GST for goods loaded in their territory.

17. Importance for Business and Government

For vendors, this rule simplifies compliance:

• No need to track where each passenger purchased goods.
• One fixed PoS per trip.

For the government, it avoids revenue overlap — the State of loading gets the GST revenue for that batch.

For passengers, it ensures uniform pricing no matter which State the train or aircraft crosses.

18. Quick Recap Table

19. Key Takeaways

• Section 10(1)(e) covers mobile sales on trains, aircraft, ships, or buses.
• Place of supply = location where goods first loaded on board.
• Ensures one State gets GST revenue — avoids double taxation.
• Keep accurate invoice records with loading point clearly mentioned.
• If multiple loading stations exist, treat each as separate PoS.

20. Final Thoughts

The GST rule for “goods supplied on board a conveyance” may sound niche, but it’s crucial for smooth travel-based commerce. It ensures that a cup of coffee sold mid-flight, a snack on a train, or a souvenir on a cruise is taxed only once — at the right place.

So next time you buy food on a journey, remember:

For businesses, the takeaway is clear: mark the loading location, mention the correct State, and you’ll never go wrong with your place of supply.

Also Read: GST Place of Supply: Installation or Assembly at Site