Place of Supply for Services on Board a Conveyance

1. Introduction

Imagine you’re flying from Delhi to Bengaluru. During the flight, you buy a sandwich, rent a headset, or stream an in-flight movie.

Now here’s the question — Which State should get the GST on those services? Delhi? Karnataka? Or somewhere in between?

That’s where Section 12(10) of the Integrated Goods and Services Tax (IGST) Act, 2017 comes in.

This provision ensures GST is applied consistently on services provided on board a conveyance — whether it’s a plane, train, ship, or bus — regardless of how many States it passes through.

2. The Legal Provision (Section 12(10))

According to the IGST Act:

Let’s simplify that 👇

Place of Supply = The place where the journey starts (first scheduled point of departure)

It doesn’t matter where the passenger ends the journey or where the service is consumed — GST belongs to the State where the journey began.

3. Why This Rule Exists

Passenger vehicles, ships, and airplanes cross multiple State borders during travel. If each State tried to claim GST on every snack, Wi-Fi service, or entertainment sold mid-journey, the system would collapse.

To avoid that chaos, the government fixed one clear rule:

• GST goes to the State of departure, not every State in between.

This ensures simple, uniform tax administration for all in-transit services.

4. What Counts as a “Conveyance”?

The term “conveyance” includes:

• Aircraft
• Train
• Vessel (ship, cruise, ferry)
• Motor vehicle (bus, luxury coach, etc.)

So, any mode of passenger transport where services are rendered during travel qualifies under Section 12(10).

5. Examples of On-Board Services

Here’s what typically falls under this rule:

• Food, snacks, or beverages served during travel
• Onboard entertainment systems
• Wi-Fi, internet access
• Massage or spa services on cruises
• Paid seat upgrades
• In-flight retail sales

6. Core Rule Simplified

Even if you travel across multiple States or the service is consumed mid-air or mid-sea — the tax jurisdiction remains where your trip began.

7. Practical Examples from ICAI PDF + Real Scenarios

Let’s go through some relatable examples 👇

Example 1 – Air Travel (Domestic Flight)

A passenger boards a flight from Delhi to Mumbai. During the flight, she buys coffee and a meal combo.

• PoS = Delhi (first point of departure)
• Tax = CGST + SGST (Delhi)

Even though she lands in Mumbai, the tax belongs to Delhi because that’s where the flight started.

Example 2 – Train Journey

Mr. Ramesh travels from Chennai to Hyderabad on a train and buys a sandwich onboard.

• PoS = Chennai (first scheduled point of departure)
• Tax = CGST + SGST (Tamil Nadu)

If the train continues to other States, it doesn’t change the PoS.

Example 3 – Cruise Services

A luxury cruise starts from Goa, travels to Kochi, and then to Lakshadweep. Onboard, guests enjoy spa, entertainment, and food.

• PoS = Goa (first departure point)
• Tax = CGST + SGST (Goa)

Example 4 – Bus Journey

A passenger boards a luxury sleeper bus from Ahmedabad to Pune. Midway, she orders snacks provided by the bus operator.

• PoS = Ahmedabad (journey’s first departure)
• Tax = CGST + SGST (Gujarat)

Example 5 – International Flight (India to Dubai)

Passenger boards in Delhi for a flight to Dubai. Buys in-flight Wi-Fi and meals.

• PoS = Delhi (first point of departure)
• Tax = IGST (inter-State / international supply)

Even though part of the journey is outside India, GST applies to the India segment up to the point of exit.

Example 6 – Return Flight

Flight from Mumbai → Delhi → Mumbai (same aircraft). Passenger buys a drink during return leg.

• PoS = Delhi (first scheduled departure of that leg)

Each “journey leg” is treated separately for GST purposes.

Example 7 – Services Before Boarding

If services (like booking fee or meal pre-order) are availed before travel, they do not fall under Section 12(10). They follow Section 12(9) (passenger transportation services).

8. Rule for Multi-Segment or Connecting Journeys

If a journey includes multiple segments (say, Delhi → Dubai → London):

• Each segment counts separately for GST.
• PoS = First scheduled departure point of that segment.

So:

• Delhi → Dubai → PoS = Delhi
• Dubai → London → Not taxable in India (service consumed outside India)

9. Special Case: Services Rendered Mid-Air or Mid-Sea

Even if the service physically occurs mid-air, the GST doesn’t split between States. It remains tied to the State of take-off (departure).

So for a Delhi–Mumbai flight:

• Meal served over Gujarat? Still taxed in Delhi.

10. CBIC Clarifications and Updates

11. What Is Not Covered Under Section 12(10)

12. Common Mistakes to Avoid

• Using destination as PoS instead of departure point.
• Treating mid-journey services as interstate when it’s same-State start.
• Charging IGST wrongly for domestic journeys.
• Missing PoS code for first departure State in e-invoices.
• Treating on-board goods (like chips or perfume) as “goods” instead of “services.”

13. Comparison with Other Place of Supply Rules

14. Compliance & Record-Keeping Tips

• Record flight/bus/train number and first departure station on invoice.
• Maintain a list of routes for internal mapping of PoS.
• File GST returns with correct “State Code” under GSTR-1.
• Maintain transaction proof for onboard POS terminals.

15. Real-Life Case Studies

Case 1 – IRCTC Onboard Catering

IRCTC provides food services during train journey from Howrah (Kolkata) to New Delhi.

• PoS = Howrah (first departure)
• CGST + SGST (West Bengal)

Case 2 – Cruise Entertainment

An Indian cruise starts from Mumbai and travels along the coast. Onboard casino and entertainment services provided.

• PoS = Mumbai (Maharashtra)
• CGST + SGST

Case 3 – Air India Flight

Air India operates Delhi → Bengaluru → Chennai. Meals sold on Delhi–Bengaluru leg.

• PoS = Delhi
• CGST + SGST (Delhi)

Case 4 – Foreign Airline

Singapore Airlines flight Delhi → Singapore Passenger buys duty-free item onboard.

• PoS = Delhi (first scheduled departure in India)
• IGST applicable on Indian leg

Case 5 – Bus Journey Within One State

Luxury coach starts in Lucknow and ends in Agra. Passenger buys tea onboard.

• PoS = Lucknow
• CGST + SGST (Uttar Pradesh)

16. Simplified Table Summary

17. Quick Recap

18. Key Takeaways

• Section 12(10) applies only to services rendered after journey begins.
• First departure point always decides the GST jurisdiction.
• Midway sales or consumption do not change PoS.
• Airlines, IRCTC, and cruise companies must show correct State code in invoices.
• Each journey leg = separate PoS determination.

19. Final Thoughts

The idea behind Section 12(10) is simple yet brilliant — one trip, one tax location.

No matter how far or how many States your journey crosses, GST follows the starting point.

So next time you buy a snack or Wi-Fi during travel, remember:

It’s a small rule, but it keeps India’s complex travel network tax-efficient and easy to administer.

Also Read: GST Place of Supply for Goods & Passenger Transport