1. Introduction
Telecom, banking, insurance, and advertising — these are services we use daily, often without realizing how complex their taxation can be.
When GST came into force, the government knew these industries don’t fit the usual “location-based” model. For example:
- A mobile plan works across States.
- A bank has customers everywhere.
- An insurance policy may cover property in one State and a person in another.
- Advertisements can be seen all over India simultaneously.
So, to make taxation fair and simple, Sections 12(11) to 12(14) of the IGST Act were created.
Let’s break down each one with examples, logic, and latest clarifications.
2. Section 12(11): Telecommunication Services
Telecom services include:
- Mobile connections (prepaid or postpaid)
- Fixed-line or broadband
- Internet leased lines
- Data connectivity
- Satellite services
These are essential but tricky to tax because usage happens across multiple locations.
Legal Provision
“The place of supply of telecommunication services shall be the location of the recipient in the records of the supplier. However, in specific cases like prepaid connections, it shall depend on the place of sale or recharge.”
So, the rule changes based on type of service.
A. Fixed-line and Broadband Services
- PoS = Location where the connection is installed.
Example: BSNL installs a broadband line at a customer’s house in Hyderabad.
- PoS = Hyderabad
- Tax = CGST + SGST (Telangana)
Even if the customer pays bills online from another city, GST belongs to where the line is physically installed.
B. Postpaid Mobile or Internet Services
- PoS = Billing address of the subscriber as per supplier’s records.
Example: A Delhi customer has an Airtel postpaid connection, but travels all over India.
- PoS = Delhi (billing address in company records)
- Tax = CGST + SGST (Delhi)
C. Prepaid Mobile or Internet Services
- PoS = Where payment or recharge is made.
Example 1: A customer recharges their prepaid SIM at a Vodafone store in Mumbai.
- PoS = Mumbai
- Tax = CGST + SGST (Maharashtra)
Example 2: Online recharge made via website using a credit card registered in Bengaluru.
- PoS = Bengaluru (address of purchaser)
- Tax = CGST + SGST (Karnataka)
D. SIM or Recharge Sold Through Agent/Distributor
- PoS = Where the voucher or SIM is sold.
Example: Retailer in Jaipur sells a recharge voucher of Jio.
- PoS = Jaipur
- Tax = CGST + SGST (Rajasthan)
E. Telecommunication on Aircraft or Ship
- PoS = First point of departure of the conveyance.
Example: A passenger uses in-flight Wi-Fi on a Delhi–Kolkata flight.
- PoS = Delhi (first scheduled point of departure)
- Tax = CGST + SGST (Delhi)
Quick Table Summary – Section 12(11)
| Type of Telecom Service | Place of Supply |
| Fixed line / broadband | Where installed |
| Postpaid mobile | Billing address |
| Prepaid (in-person recharge) | Place of sale |
| Prepaid (online recharge) | Address of purchaser |
| In-flight / ship communication | First point of departure |
Latest Clarifications
| CBIC Circular / Notification | Key Point |
| Circular 209/3/2024-GST (July 2024) | PoS for e-wallet or online prepaid recharge = purchaser’s registered address |
| Notification 09/2024-IGST (Oct 2024) | Confirms PoS for telecom onboard conveyance = place of first departure |
| CBIC Advisory (Jan 2025) | Data center and leased line PoS = location where line installed |
3. Section 12(12): Banking and Financial Services
These include:
- Banking
- Financial institutions
- Stockbrokers
- Asset management
- Loan and credit card services
Legal Rule
“The place of supply of banking and other financial services, including stock broking, shall be the location of the recipient of services on the records of the supplier. ”
If the location is not available, PoS = supplier’s location.
Example 1 – Bank Account Holder (Registered Address Known)
A customer has an SBI account registered in Kolkata. Even if they transact from Delhi,
- PoS = Kolkata
- Tax = CGST + SGST (West Bengal)
Example 2 – Credit Card Issued to Customer
A credit card issued by HDFC Bank, Chennai, to a customer whose registered address is in Bengaluru.
- PoS = Bengaluru (customer’s address)
- Tax = CGST + SGST (Karnataka)
Example 3 – Online Stock Broking
Broker located in Mumbai provides demat services to a client registered in Delhi.
- PoS = Delhi (client address in records)
- Tax = IGST (inter-State)
Example 4 – Customer without Address on Record
If the bank doesn’t have customer address (say for walk-in currency exchange):
- PoS = Location of supplier (branch location)
Simplified Table – Section 12(12)
| Scenario | Place of Supply |
| Customer’s address available | Customer’s address |
| Address not available | Supplier’s location |
Latest Updates
| Circular / Notification | Clarification |
| CBIC Circular 209/3/2024 | PoS for financial services = customer address in KYC records |
| RBI-GST Integration Update (2024) | Banks must maintain GST State-wise mapping of accounts |
| E-Invoice Change (Aug 2024) | Financial institutions to show PoS code of customer’s State |
4. Section 12(13): Insurance Services
Insurance services often involve multiple parties — the policyholder, insured person, and beneficiary — all possibly in different States.
Rule Summary
| Recipient Type | Place of Supply |
| Registered person | Location of recipient |
| Unregistered person | Address on record of the recipient |
Example 1 – Corporate Group Insurance
ABC Ltd. (registered in Delhi) takes a group health insurance from ICICI Lombard (Mumbai).
- PoS = Delhi
- Tax = IGST (since supplier in Maharashtra, recipient in Delhi)
Example 2 – Individual Insurance (Unregistered)
Mr. Ramesh (address in Bengaluru) takes a car insurance policy from HDFC Ergo.
- PoS = Bengaluru (address in insurer’s records)
- Tax = CGST + SGST (Karnataka)
Example 3 – Marine Insurance for Export Goods
Goods shipped from Chennai to Singapore insured by a Mumbai-based insurer for a Chennai exporter.
- PoS = Chennai (location of registered recipient)
- Tax = IGST (inter-State)
CBIC Updates
| Circular / Notification | Key Clarification |
| CBIC Circular (2024) | For insurance renewals, same address rule applies as per original policy record |
| Notification 09/2024 | Clarifies PoS for B2C policies = insured person’s registered address |
5. Section 12(14): Advertisement Services to Government
Government bodies often hire ad agencies for:
- Awareness campaigns
- Public notices
- Tourism ads
- Election promotions
- Social campaigns
Since these ads appear in multiple States, determining PoS is tricky.
Rule Summary
“For advertisement services to the Central Government, State Government, statutory body, or local authority, the place of supply shall be taken as each State or Union territory in proportion to the amount attributable to the dissemination in that State or Union territory.”
That means — the ad spend must be split State-wise based on audience reach or media coverage.
Example 1 – Government Tourism Campaign
The Ministry of Tourism (Delhi) runs a TV ad nationwide promoting “Incredible India.” The campaign cost ₹5 crore, with 30% viewership in Maharashtra, 20% in Kerala, 10% in Gujarat, and so on.
- The total amount must be split proportionally per State.
- Tax = CGST + SGST for each State’s share.
Example 2 – State Government Newspaper Ads
Tamil Nadu Government publishes ads in newspapers circulated across TN and Puducherry.
- Split value as per circulation area.
- Pay GST to both TN and Puducherry proportionately.
Example 3 – Local Authority Billboard Campaign
Municipal Corporation of Delhi runs hoardings only within Delhi.
- PoS = Delhi only
- Tax = CGST + SGST (Delhi)
Clarifications
| Circular / Notification | Date | Clarification |
| Circular 209/3/2024 | July 2024 | States must receive GST share based on ad distribution ratio |
| CBIC Advisory 2025 | Jan 2025 | Ad agencies must maintain State-wise breakdown of billing |
| GEM Portal Update (2024) | – | Mandates vendors to specify PoS per State for government contracts |
6. Comparison of Sections 12(11)–12(14)
| Service Type | Section | Place of Supply Rule |
| Telecommunication | 12(11) | Based on connection / billing / recharge location |
| Banking & Financial | 12(12) | Recipient’s address on record |
| Insurance | 12(13) | Registered → recipient’s location; Unregistered → address on record |
| Advertisement to Govt. | 12(14) | Each State in proportion to ad reach |
7. Common Mistakes to Avoid
- Using wrong billing address for telecom postpaid services
- Ignoring PoS split for government ad campaigns
- Treating financial services as export when recipient in India
- Applying IGST wrongly for domestic insurance policies
- Not maintaining address records in telecom or insurance sectors
8. Compliance & Documentation Tips
- Maintain accurate address records in systems (billing, KYC, CRM)
- For telecom, note sale or recharge location clearly
- For banking, store customer KYC address as per RBI norms
- For insurance, retain copy of proposal form or policy document
- For government ads, maintain State-wise viewership/coverage data
9. Simplified Summary Table
| Service | Section | Registered Recipient | Unregistered Recipient | Notes |
| Telecom | 12(11) | Billing/connection location | Sale/recharge location | Includes in-flight Wi-Fi |
| Banking | 12(12) | Address on record | Supplier location | KYC address is valid proof |
| Insurance | 12(13) | Recipient location | Address on record | Applies to renewals too |
| Advertisement to Govt. | 12(14) | Split per State | Split per State | State-wise allocation mandatory |
10. Final Thoughts
Sections 12(11) to 12(14) may look technical, but their goal is simple —
👉 “Tax where the service is consumed or recorded.”
From your phone bill to your insurance premium, from your credit card service to a government ad campaign — GST ensures each State gets its fair share of revenue based on where the benefit arises or is recorded.
In short:
“📡 Telecom → Where you connect 🏦 Banking → Where you’re registered 🛡️ Insurance → Where you’re covered 📺 Government Ads → Where it’s displayed”
By following these clear PoS rules, businesses can avoid errors, audits, and disputes — and stay 100% compliant under GST.
