You know, when people talk GST, most of the focus goes on goods. Trucks moving from one state to another, invoices, warehouses… all that. But services? That’s where the real chaos is. Because unlike a truck, you can’t point and say, “Look, that haircut is moving from Delhi to Jaipur.” Services don’t move like that. They’re invisible. They can be delivered over the phone, through Zoom, or in person. And that’s exactly why the GST law had to spell out special rules about where a service is “supplied.”
Why Place of Supply for Services Is Even a Thing
GST is destination-based. That’s the golden rule. The tax belongs to the place where the service is consumed, not where it started. Simple idea, messy in practice.
👉 Example: A consultant sitting in Delhi gives advice over a Zoom call to a client based in Mumbai. The consultant never leaves Delhi. But the benefit is enjoyed in Mumbai. So the place of supply? Mumbai. Which means IGST applies, not Delhi GST.
That tiny detail—just figuring out “where”—decides what tax shows up on the bill, and whether your client can claim input credit.
The General Rule Most People Start With
The law does give one broad thumb rule:
- If your customer is registered under GST, the place of supply = their location.
- If your customer is not registered, then it falls back to where you, the supplier, are located.
That’s it. One clean line.
👉 A software firm in Noida works for a registered company in Hyderabad? Place of supply = Hyderabad. IGST. 👉 The same software firm helps a student who walks in with a laptop, not registered under GST? Place of supply = Noida. CGST + SGST.
Looks easy, right? Yeah, until the exceptions start rolling in.
Property-Linked Services
Anything tied to a piece of land or building gets its own treatment. Hotels, renting, construction, interior designing—it doesn’t matter where the client lives, the tax sticks to where the property is.
So if a tourist from Punjab books a hotel room in Goa, it’s Goa’s GST that applies. The hotel charges CGST + SGST of Goa. The client’s address back home? Totally irrelevant.
Events, Food, and Fun
This one’s easy to understand. You can’t enjoy a wedding in Delhi if the planner set it up in Jaipur. Same goes for catering or eating in a restaurant. So, the law says: place of supply is wherever the service is actually delivered.
If a Jaipur wedding planner organizes an event in Udaipur for a Mumbai client, Udaipur gets the tax.
And restaurants? Doesn’t matter if the customer came from another state—the tax belongs to the state where the food was served. That’s why your Domino’s bill looks different depending on the city you eat in.
Transport: Goods and People
Transport adds its own twist.
For goods, if the client is registered, you go with their location. If they’re not registered, then it’s the place where you handed over the goods.
So if a logistics firm in Chennai delivers goods for a Hyderabad-based company, Hyderabad gets the tag as place of supply.
For passengers, it’s even simpler: wherever the journey starts. Buy a ticket from Delhi to Agra? Place of supply = Delhi. Even if you hop off midway at Mathura, Delhi is what matters.
The Digital Age: OIDAR Services
Netflix, Spotify, cloud platforms—all those fall under a category called OIDAR (Online Information and Database Access or Retrieval). Fancy name for “online stuff you subscribe to.”
And here, the rule is tied to the customer’s location. If you’re in Kolkata watching Netflix, GST says the supply happened in Kolkata, no matter where Netflix runs its servers. That’s why you see GST tagged on your monthly subscription bill.
Imports and Exports of Services
This is where many startups trip.
If you’re importing a service, meaning you’re in India and the service provider is abroad, GST says the place of supply is India. And here’s the kicker—you, the Indian client, pay GST under Reverse Charge Mechanism (RCM).
👉 Imagine a Delhi startup hiring a US graphic designer. The work is done in the US, but since the benefit is enjoyed in India, GST applies here. The startup pays under RCM.
Exports are the opposite story. If you provide a service to someone outside India, it’s considered an export. And exports are zero-rated. That means you don’t charge GST, but you can still claim input tax credit refunds.
👉 Example: A Delhi digital marketing firm runs campaigns for a client in London. Place of supply = UK. Export, zero-rated.
The Common Mistakes Everyone Makes
This is where I see businesses getting notices. Services don’t have a “truck” you can track, so people assume. And assumptions = trouble.
Some of the classic goof-ups:
- Charging CGST + SGST when it should have been IGST.
- Forgetting the special property rule (like hotels).
- Ignoring reverse charge for imports.
- Assuming digital subscriptions are outside GST—they’re not.
I know one Delhi company that hired a consultant in Singapore. They didn’t pay GST, thinking, “Hey, he’s abroad, it’s fine.” Six months later, they got a notice demanding GST under RCM plus late fees. They had to cough it up. Painful.
A Few Real-World Scenarios
- A Bangalore CA audits accounts for a Chennai company → Place of supply = Chennai. IGST.
- A Mumbai family books a resort in Kerala → Place of supply = Kerala. CGST + SGST.
- A Delhi student subscribes to Spotify → Place of supply = Delhi. Tax included in subscription.
- A Kolkata exporter hires a UK consultant → Place of supply = India. GST paid under RCM.
- An Indian IT firm builds a website for a US client → Place of supply = USA. Export, zero-rated.
See the theme? For goods, you follow the truck. For services, you follow the benefit.
Why This Matters for Businesses
This isn’t some legal trivia. Place of supply tells you:
- Which tax to charge (CGST+SGST vs IGST).
- Whether your client can claim ITC.
- If you’re on the hook for RCM.
Get it wrong, and you’ll have unhappy clients and maybe even a tax notice waiting in your inbox.
Wrapping It Up
Place of supply for services is like a compass. It quietly decides who collects the tax, what you put on your invoice, and whether you’re compliant.
It feels complicated at first, but the trick is to think in buckets:
- Property → look at the property’s location.
- Food and events → look at where it actually happened.
- Transport → look at where it starts (for people) or who’s receiving (for goods).
- Online → look at where the customer lives.
- Imports → you pay in India under RCM.
- Exports → zero-rated, refund available.
Services are messy because they’re invisible. But GST doesn’t care about visibility—it cares about consumption. If you always ask, “Where did the service actually land?” you’ll usually find the right answer.
