What it means
GST is a tax on consumption, so the tax goes to the state where the supply is consumed. The place of supply names that state. Compare it with the supplier’s own state (the first two digits of the supplier’s GSTIN):
- Same state → intra-state supply → CGST + SGST (or CGST + UTGST).
- Different state → inter-state supply → IGST.
- Exports and supplies to an SEZ are always inter-state → IGST.
For goods, the place of supply is usually where the movement of goods ends (IGST Act, section 10). For most services to a registered business, it is the recipient’s location (section 12).
Example
Kaveri Agencies, Mysuru (GSTIN starting 29, Karnataka) sells goods worth ₹1,00,000 at 18%.
| Buyer | Place of supply | Tax on the invoice |
|---|---|---|
| Shree Lakshmi Hardware, Bengaluru | 29-Karnataka | CGST ₹9,000 + SGST ₹9,000 |
| Annai Traders, Chennai | 33-Tamil Nadu | IGST ₹18,000 |
The total tax is the same ₹18,000. What changes is who gets it, and which ITC ledger the buyer uses.
Common mistakes
- Using the billing address when goods are shipped elsewhere. In a bill-to-ship-to sale the law has its own rule; check it before you invoice.
- Charging CGST + SGST on an inter-state sale. The tax is then paid to the wrong government, and on an e-invoice the IRP expects IGST for an inter-state supply.
- Leaving the place of supply off the invoice. Rule 46 asks for it on inter-state supplies.
In MyRecords
MyRecords fills an empty place of supply on quotations, orders, deliveries and sales invoices from the customer’s GSTIN, else the billing or shipping address, and you can change it. Since 1 Nov 2026 it checks the tax against it on quotations, orders, deliveries, invoices and purchase documents: an out-of-state party gets IGST, an in-state party gets CGST + SGST, and SEZ or overseas parties always get IGST. A wrong kind of tax is switched or refused before you save.