Place of Supply Rules Explained: Why They Decide Your GST Split
Most invoicing software — including Settle — defaults the place of supply to your customer's own state on file, because that's correct the overwhelming majority of the time. But the actual GST rule is more specific than "customer's state," and knowing the difference matters the moment a transaction isn't a simple one.
The rule, in practice
For most B2B services, place of supply is the recipient's location — generally their registered address. If that's in your own state, you charge CGST+SGST. If it's a different state, you charge IGST instead. See how that split is actually calculated once you know which one applies.
Where it gets specific
- Goods delivered to a different address than the buyer's registered office — place of supply generally follows the delivery location, not the billing address on the buyer's GSTIN.
- Services related to immovable property (construction, interior work, renting) — place of supply is where the property actually is, regardless of where either party is registered.
- Event-based services (a conference, an exhibition) — place of supply is where the event is held.
- A client's branch office receiving the service in a different state than their head office's GSTIN — this is the single most common real-world mismatch for consultants and agencies working with multi-location clients.
Why this isn't just a technicality
Get the place of supply wrong and you charge the wrong tax type — CGST+SGST when it should've been IGST, or the reverse. Your customer's input tax credit claim can be rejected for exactly this reason, even though the total tax amount charged was correct. It's a classic case of a mistake that looks harmless on your side and becomes a real problem on theirs.
If your business regularly deals with clients whose delivery location differs from their registered address, always check — don't assume the default. The GST portal publishes the full place-of-supply provisions under the IGST Act for exactly this reason.