A Deep Dive into the 'Place of Supply' Rules for GST in India

The Global Professional's Playbook for Mastering GST Place of Supply

This guide isn't about memorizing tax law; it's about executing a precise, three-step framework that moves you from uncertainty to control over your cross-border transactions. By systematically diagnosing your situation, applying the correct strategy, and arming yourself with the right tools, you can eliminate compliance risk and focus on what you do best.

Step 1: The Diagnostic — Pinpoint Your GST Scenario

Before applying any rule, you must first understand the landscape. This means answering three foundational questions to clarify your specific obligations under India's GST framework for place of supply.

1. Goods or Services? This is the critical first distinction. The rules for physical goods, governed by Section 10 of the IGST Act, focus on the movement of those goods. For most elite professionals—consultants, developers, and strategists—the focus is on services, which fall under Section 12 for domestic transactions and Section 13 for international ones.

2. Client Location: India or Abroad? Your client's location is the primary determinant of the tax you apply.

• Client in India: The transaction is domestic. You will charge either CGST + SGST for an intra-state supply (client in your state) or IGST for an inter-state supply (client in another Indian state).
• Client Abroad: The transaction is a cross-border supply. For services provided to a client in the US, EU, or elsewhere, the place of supply is the recipient's location. This transaction qualifies as an export of services, which is a "zero-rated supply."

3. Client Profile (for Indian Clients): Business (B2B) or Consumer (B2C)? When dealing with domestic clients, their GST registration status is key.

Step 2: The Strategy — Secure Your Status as an Exporter

Once you've diagnosed your scenario, the strategy for global services is clear: build an irrefutable case that your place of supply is outside India. This allows you to classify your service as a "zero-rated supply"—a powerful provision that treats your service as taxable but at a 0% rate. You don't charge IGST to your foreign client, making you more competitive, and you can still claim a refund of the GST paid on your business inputs.

To qualify your service as an export, you must meet five conditions under Section 2(6) of the IGST Act:

1. The supplier (you) is located in India.
2. The recipient (your client) is located outside India.
3. The place of supply is outside India.
4. Payment is received in convertible foreign exchange.
5. You and your client are not merely different establishments of the same entity.

Your Documentation is Your Defense Proving these conditions is non-negotiable. A simple invoice is insufficient. Maintain a robust paper trail for every international project:

• Master Service Agreement (MSA): Your foundational document, clearly stating the client's legal name and registered foreign address.
• Proof of Payment: A Foreign Inward Remittance Certificate (FIRC) from your bank is the gold standard, confirming payment from a foreign source in foreign currency.
• Compliant Invoices: Your invoice must explicitly state "Supply Meant for Export under Bond or LUT without Payment of IGST" (if you have a Letter of Undertaking).

Getting this wrong has serious consequences. If you incorrectly assess the place of supply for a domestic client and charge the wrong tax, authorities can deny their claim for Input Tax Credit (ITC), creating a significant financial liability and damaging your professional credibility.

Step 3: The Armor — Execute with Bulletproof Invoicing

Strategy requires flawless execution. This practical toolkit turns rules into action, demonstrating professionalism and eliminating compliance friction.

The Exporter's Invoice Checklist Before sending any invoice to a global client, ensure it passes this check:

• Clear Identification: Does it include your GSTIN and the client's full legal name and foreign address?
• Explicit Place of Supply: Is the Place of Supply explicitly stated as the client's country (e.g., "Place of Supply: New York, USA")?
• Correct Export Declaration: Does it include the mandatory declaration for export, such as "Supply Meant for Export under Bond or Letter of Undertaking without Payment of IGST"? A Letter of Undertaking (LUT) is a simple online filing that allows you to export without paying IGST upfront, which is a major cash flow advantage.

Demystifying the "Bill-to-Ship-to" Scenario This scenario can cause confusion. Imagine your client in New York ("Bill-to") hires you to provide services for their subsidiary in London ("Ship-to"). The rule is clear: the place of supply is deemed to be the location of the person who gives the instruction—the "Bill-to" party. You would invoice the New York entity, list the Place of Supply as the USA, and treat it as a zero-rated export.

Conclusion: Invoice Any Client, Anywhere, with Absolute Confidence

The complexity of GST place of supply rules is not a barrier but a structured system that can be mastered. The anxiety of compliance risk can be systematically dismantled. By following this 3-step playbook—Diagnose, Strategize, and Armor Up—you transform compliance from a source of stress into a professional strength.

You are no longer guessing; you are operating from a framework of control.

• Diagnosis gives you clarity.
• Strategy provides a defensible position for your global operations.
• Armor ensures flawless execution.

This framework is your pathway to operating with complete authority over your financial domain. You now have the clarity and tools to manage your GST obligations, protect yourself from risk, and dedicate your energy to what truly matters: delivering exceptional work. You are in command.