1. Introduction
Under GST, knowing where a service is supplied — the Place of Supply (PoS) — determines how tax applies. When both the supplier and recipient are in India, Section 12 applies.
But when one of them is outside India (for example, an Indian company providing services to a foreign client, or vice versa), GST rules switch to Section 13 of the IGST Act.
This part of the law decides:
- Whether the service is taxable in India,
- Whether it qualifies as an export (zero-rated), and
- Whether IGST or no GST should be applied.
2. Scope of Section 13
Section 13 applies only when:
“Either the supplier or the recipient of services is located outside India.”
This means:
- Indian supplier → foreign recipient
- Foreign supplier → Indian recipient
- Both within India (then Section 12 applies)
3. General Rule (Section 13(2))
“The place of supply of services, except the services specified in sub-sections (3) to (13), shall be the location of the recipient of services.”
This is the default rule for most international transactions.
If Recipient Location Known → PoS = Recipient’s Location
Example 1 – Export of Consultancy Services:
An Indian company provides business consultancy to a client in the USA.
- PoS = USA (recipient’s location)
- Result = Export of services → Zero-rated under GST
If Recipient Location Not Known → PoS = Supplier’s Location
Example 2 – Foreign Tourist Using Indian Wi-Fi: A tourist in India uses Wi-Fi provided by an Indian company, but no address available.
- PoS = Supplier’s location (India)
- GST applicable
So, in simple terms:
“Most services = Place of recipient (outside India) → treated as export if conditions met.”
4. Exceptions to the General Rule (Sections 13(3)–13(13))
Certain services have special rules because they’re tied to physical performance, property, or usage.
Let’s explore them one by one 👇
Section 13(3): Services Requiring Physical Presence or Property Location
Applies to:
- Services performed on goods made physically available
- Services requiring recipient’s personal presence
- Property-related services
Rule
- PoS = Place where services actually performed
Example 1 – Repair of Machinery Brought to India
A US company sends a machine to India for repairs.
- PoS = India (where repair performed)
- GST applicable → Not export
Example 2 – Beauty or Health Service to Foreign Tourist
A Canadian tourist gets a spa service in Goa.
- PoS = Goa
- GST applicable
Example 3 – Remote Consultancy (No Physical Presence)
An Indian architect sends designs to a client in Australia without visiting.
- PoS = Recipient’s location (Australia) → Export of services
Section 13(4): Services Related to Immovable Property
- PoS = Location of the property
Example 1 – Hotel Booking by a Foreign Client
A Singapore resident books a hotel in Jaipur.
- PoS = Jaipur (property in India)
- GST applicable
Example 2 – Property Consultancy Abroad
Indian firm provides consultancy on property in London.
- PoS = London
- Not taxable in India
Section 13(5): Admission to Events
- PoS = Where the event actually happens
Example: A foreigner buys a ticket for a conference held in Mumbai.
- PoS = Mumbai
- GST applicable
Section 13(6): Services Relating to Events (Organisation of Events)
| Recipient Type | Place of Supply |
| Registered | Recipient’s location |
| Unregistered | Event location |
Example 1: Indian event planner organizes expo in Dubai for a Dubai company → PoS = Dubai → Export
Example 2: Same planner organizes expo in India for foreign client → PoS = India → GST applicable
Section 13(7): If Event Held in More than One Country
- PoS = Proportionate to where event actually held, If partly in India → Split GST accordingly.
Example: Trade fair conducted 60% in Delhi, 40% in Singapore → Split PoS between India and abroad.
Section 13(8): Intermediary Services
An intermediary is someone arranging or facilitating a service or supply between two parties.
- PoS = Supplier’s location (always)
Example 1 – Commission Agent in India for Foreign Buyer
Indian agent arranges orders between a US company and a French customer.
- PoS = India (supplier location)
- GST applicable → Not export
Example 2 – Travel Agent for Foreign Client
Indian travel agent books hotels in India for a foreign tourist.
- PoS = India → Taxable
Note:
Many export-oriented intermediaries face challenges because this rule denies export status even if recipient is outside India.
Section 13(9): Passenger Transportation
- PoS = Where the passenger embarks for the journey
Example: Passenger boards flight in Delhi to Dubai.
- PoS = Delhi
- GST applicable on Indian part only
Section 13(10): Services on Board a Conveyance
- PoS = First scheduled point of departure
Example: Passenger uses in-flight Wi-Fi from Mumbai to Singapore.
- PoS = Mumbai
- IGST charged on Indian part
Section 13(11): Goods Transport (Cross-Border)
- PoS = Destination of the goods
Example 1 – Export Freight
Goods shipped from Mumbai Port to London.
- PoS = London (destination outside India)
- Zero-rated (export of service)
Example 2 – Import Freight
Goods shipped from Shanghai to Chennai.
- PoS = Chennai (India)
- GST applicable under reverse charge (RCM)
Section 13(12): Telecommunication Services
| Type | Place of Supply |
| Services involving equipment (leased lines, circuits) | Where equipment installed |
| Other telecom / satellite | Where services used or enjoyed |
Example: Foreign ship uses Indian satellite bandwidth.
- PoS = Where used → India → GST applicable
Section 13(13): Government Advertisement Services
If Government located in India receives advertisement services used partly outside India:
- PoS = Split proportionally between India and abroad.
Example: Tourism ad campaign runs in India and UAE → Split based on viewership ratio.
5. Comparison Table — All Subsections of Section 13
| Section | Type of Service | Place of Supply |
| 13(2) | General Rule | Recipient’s location |
| 13(3) | Services performed on goods or person | Where performed |
| 13(4) | Immovable property | Property location |
| 13(5) | Admission to event | Event location |
| 13(6) | Organisation of event | Recipient / Event location |
| 13(7) | Multi-country events | Proportionate distribution |
| 13(8) | Intermediary services | Supplier’s location |
| 13(9) | Passenger transport | Place of embarkation |
| 13(10) | Onboard services | First scheduled departure |
| 13(11) | Goods transport | Destination of goods |
| 13(12) | Telecom | Where used/enjoyed |
| 13(13) | Government ads | Split between countries |
6. How to Determine if It’s an Export of Service
A service qualifies as “export of service” under Section 2(6) of the IGST Act if all these conditions are met:
- Supplier in India
- Recipient outside India
- Place of supply outside India
- Payment received in convertible foreign exchange (or INR allowed by RBI)
- Supplier and recipient are not “distinct persons”
If all five are met → Zero-rated supply → No GST payable.
Example – Export of Digital Marketing Services
Indian digital agency provides marketing campaign to a UK client.
- Recipient outside India
- PoS = UK
- Payment in USD
👉 Export of service → Zero-rated → No GST payable
Example – Indian Agent for Foreign Client (Intermediary)
Indian agent helps foreign company sell in India.
- PoS = India (intermediary rule)
- Not export → GST applicable
7. Common Mistakes to Avoid
- Treating intermediary exports as zero-rated when PoS = India
- Forgetting to collect foreign payment proof for export validation
- Not splitting multi-country event or ad PoS correctly
- Using recipient address wrongly when not maintained properly
- Confusing Section 12 (domestic) with Section 13 (cross-border)
8. Compliance Tips
- Keep FIRC / Bank Realisation Certificate (BRC) for all export payments
- Maintain invoice with country and currency details
- Declare PoS clearly on invoices and LUT filings
- For cross-border freight, show “Destination of goods” as PoS
- Update accounting system for Section 13-based transactions
9. Real-Life Case Studies
| Case | Description | Place of Supply | GST Impact |
| A | Indian IT company serving UK client | UK | Export (Zero-rated) |
| B | Indian agent arranging foreign orders | India | Taxable |
| C | Indian architect designing Dubai hotel | Dubai | Export |
| D | Repair of foreign ship in India | India | Taxable |
| E | Freight Mumbai → London | London | Export |
| F | Import freight Shanghai → Chennai | Chennai | RCM payable |
| G | In-flight Wi-Fi Delhi → Singapore | Delhi | IGST |
| H | Foreign event organised by Indian company | Foreign venue | Export |
10. Simplified Summary
| Category | Place of Supply | GST Applicability |
| Most services | Recipient’s location | Export if recipient abroad |
| Property / Physical services | Place of performance | Taxable if in India |
| Transport of goods | Destination of goods | Export/Import |
| Passenger transport | Place of embarkation | Taxable (Indian leg) |
| Intermediary | Supplier location | Taxable |
| Government ads | Split | Partly taxable |
11. Key Takeaways
- Section 13 covers all international service transactions.
- General rule → PoS = recipient’s location.
- Some special services (property, events, intermediary) have their own logic.
- For exports → PoS must be outside India, payment in foreign exchange, and supplier–recipient distinct.
- Always check PoS carefully to determine GST applicability or exemption.
12. Final Thoughts
Section 13 is like the global compass of GST — guiding cross-border taxation and ensuring that India taxes only what’s consumed within its borders.
In short:
“🌐 If your service benefits a foreign recipient abroad — it’s export (zero-rated). 💼 If it benefits someone in India — GST applies.”
By understanding these PoS rules, businesses can structure contracts better, claim export benefits smoothly, and avoid compliance risks in international trade.
