Key takeaways
What this article covers, in order:
- What is the place of supply?
- Why it matters for your business
- A quick example
- How HelloBooks helps
- Frequently asked questions
It is the rule that decides which state gets your tax. Here is a plain-English explanation for Indian business owners.
What is the place of supply?
The place of supply decides whether a transaction is intra-state (CGST+SGST) or inter-state (IGST).
GST in India is a destination-based tax split into CGST and SGST for sales within a state and IGST for inter-state sales. Following the rate overhaul effective 22 September 2025, most goods and services sit in a simplified two-slab structure (5% and 18%), with a higher 40% rate reserved for a short list of luxury and "sin" items, and essentials kept exempt.
Why it matters for your business
Understanding the place of supply keeps your invoices compliant, protects your input tax credit, and avoids notices from the department. Getting this right at the start saves painful corrections at year-end.
- For goods, usually where the goods are delivered.
- For services, generally the location of the recipient, with special cases.
- Getting it wrong puts tax in the wrong head and triggers mismatches.
A quick example
A consultant in Pune serving a client in Bengaluru charges IGST because the place of supply is Karnataka.
How HelloBooks helps
HelloBooks is built for exactly this kind of GST work. HelloBooks is free GST accounting software for Indian businesses: you can raise GST-compliant invoices with the correct HSN or SAC code, track input tax credit against your GSTR-2B, and file unlimited GSTR-1 and GSTR-3B returns from one dashboard.
- GST-ready invoicing with automatic CGST / SGST / IGST split and HSN or SAC codes.
- GSTR-2B reconciliation so you only claim the input tax credit you are actually entitled to.
- GSTR-1 and GSTR-3B filing free, with GSTR-9 generated ready to file and e-invoicing on higher plans.
- Due-date reminders so a late fee never catches you by surprise.
Thousands of founders, freelancers and accountants in India run their books on HelloBooks — you can start free, with no credit card.
Frequently asked questions
What exactly is the place of supply in GST?
The place of supply decides whether a transaction is intra-state (CGST+SGST) or inter-state (IGST).
Is this the same across all Indian states?
GST is a national law, so the core rules are the same across India, but the state (SGST) half of the tax and your jurisdictional office depend on the place of supply.
Does HelloBooks handle this automatically?
Yes — HelloBooks applies the correct treatment on every invoice and carries it through to your GSTR-1 and GSTR-3B so you do not have to calculate it by hand.
