Tax
CGST and SGST or IGST? Place of supply, with examples
Which GST to charge depends on one thing: whether the place of supply is in your state. How to find it for goods and services, the exceptions, and what to do if you charged the wrong one.
13 Nov 2026 · 7 min read
A consultant in Pune sends an invoice to a client in Bengaluru with CGST 9% and SGST 9% on it. The client's accountant sends it back: it should be IGST 18%. The total was right to the rupee. But CGST and SGST go to Maharashtra and the centre, IGST goes through the centre to Karnataka, and the client can only claim the tax that was charged the right way.
Which GST you charge comes down to one question: is the place of supply in the same state as you? This post explains how to find it, with examples. It is plain guidance, not legal advice; your CA can confirm unusual cases.
The rule in one line
- Place of supply in your state: charge CGST and SGST, each at half the rate. 18% becomes 9% plus 9%.
- Place of supply in another state: charge IGST at the full rate.
- Place of supply outside India: it is an export, zero-rated. Most small exporters charge no IGST under an LUT.
The buyer pays the same total in each case. In the union territories without their own legislature (Chandigarh, Ladakh, Lakshadweep, the Andaman and Nicobar Islands, and Dadra and Nagar Haveli and Daman and Diu) the state half is called UTGST instead of SGST. Delhi, Puducherry and Jammu and Kashmir use SGST.
Goods: where the delivery ends
For goods moving inside India, the place of supply is where the movement ends: the delivery address. A Pune shop selling chairs to a customer in Nashik charges CGST and SGST. Delivering the same chairs to Indore makes it IGST.
Bill to one party, ship to another. A Surat mill sells fabric to a trader in Mumbai, and on the trader's instruction ships it straight to the trader's customer in Jaipur. The place of supply is the state of the party who is billed, Maharashtra, not the state where the goods land. Gujarat to Maharashtra means IGST. Goods installed at the site, like a lift, take the place where they are installed.
Services: usually where the buyer is
The general rule, when you and your buyer are both in India:
- Registered buyer: the state of their GSTIN. A Bengaluru company with a Karnataka GSTIN means Karnataka.
- Consumer: the address you have for them. If you have none, your own location.
A company with GSTINs in several states takes the place of supply of the GSTIN it asks you to bill. Bill the Mumbai branch on its Maharashtra GSTIN and a Pune supplier charges CGST and SGST, even if the people you worked with sit in Chennai.
The exceptions worth knowing
Some services are tied to a place, and the general rule does not apply:
| Service | Place of supply |
|---|---|
| Work on a building or land: construction, repairs, interior work, hotel stays | Where the property is |
| Restaurant and catering, salon, gym, health services | Where the service is actually performed |
| Tickets to an event, an exhibition or an amusement park | Where the event or park is |
| Organising an event, training, performance appraisal | A registered buyer’s state. For a consumer, where it happens |
| Passenger transport | Where the passenger boards |
So a Pune interior designer working on a flat in Goa charges IGST, wherever the owner lives. A Bengaluru trainer running a workshop in Pune for a Maharashtra-registered company also charges IGST, because the trainer is in Karnataka and the buyer's state is Maharashtra. There are more special cases, for telecom, banking, courier and online services among others. If what you sell is not a plain service to a buyer, check the rule for it.
Four sales, worked out
| Sale by a Pune business | Place of supply | Tax on ₹1,00,000 at 18% |
|---|---|---|
| Software support to a registered firm in Nagpur | Maharashtra | CGST ₹9,000 + SGST ₹9,000 |
| Logo design for a consumer in Hyderabad | Telangana, their address | IGST ₹18,000 |
| Furniture delivered to a hotel in Panaji | Goa | IGST ₹18,000 |
| Website for a company in Dubai | Outside India | Export under LUT, ₹0 |
The rates here are examples. Since September 2025 most goods and services are at 5% or 18%, and the right rate depends on what you sell. Exports have their own conditions, explained in billing clients abroad.
Write it on the invoice
For a sale to another state, the invoice must show the place of supply with the state name. Printing it on every invoice is simpler and harmless: “Place of supply: Karnataka (29)”. The two digits are the state code, the same as the first two digits of a GSTIN. The full list of fields is in what a GST tax invoice needs.
If you charged the wrong one
Charging CGST and SGST when it should have been IGST, or the other way round, does not just get swapped. You pay the correct tax, and claim a refund of the tax paid the wrong way. No interest is due on the correct tax when you fix it this way. For the invoice itself, raise a credit note against the wrong one and issue a new one with the right tax, then let your customer know so their records match yours. Your CA will handle the refund side.
The short version
- Place of supply in your state: CGST and SGST, half each. Another state: IGST. Abroad: an export.
- Goods: where delivery ends. Bill-to-ship-to: the billed party's state.
- Services: a registered buyer's GSTIN state, or a consumer's address.
- Property, events, restaurants, salons, training and transport have their own rules.
- Wrong tax charged: pay the right one, claim the wrong one back, and fix the invoice with a credit note.