Understanding Section 10(1) of the IGST Act

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GST is a destination-based tax system, meaning tax follows the goods to the place where they are finally consumed.
Because of this, the Place of Supply (POS) becomes one of the most critical elements a business must determine correctly—for correct GST charging and seamless Input Tax Credit (ITC) flow.

This blog breaks down each section of the law using simple explanations and practical examples so you can apply these rules confidently in real situations.

1. Section 10(1)(a): The “Movement” Rule

The Law:

"Where the supply involves movement of goods… the place of supply shall be the location of the goods at the time at which the movement of goods terminates for delivery to the recipient."

In Plain English:

Where do the goods finally stop moving?
That is your Place of Supply.

Simple Understanding:

Wherever the goods finally reach, that place becomes the POS.

Practical Example: The “Ex-Works” Dilemma

Scenario:
You are a manufacturer in Maharashtra. A buyer from Gujarat orders goods but sends their own truck to pick up the goods from your Pune factory.

Common Confusion:
Since goods were handed over in Maharashtra, should you charge CGST + SGST?

Correct Approach:

  • If the goods ultimately move to Gujarat (supported by e-way bill/delivery evidence),
    → POS = Gujarat
  • Tax to charge = IGST

Why?
Even though handover occurred in Pune, the movement terminates in Gujarat, making it an inter-State supply.

2. Section 10(1)(b): The “Bill-To-Ship-To” Rule

The Law:

"Where the goods are delivered… on the direction of a third person… it shall be deemed that the said third person has received the goods and the place of supply shall be the principal place of business of such person."

In Plain English:

Ignore where the goods actually went.
Focus on who instructed the delivery.
This is the concept of Deemed Receipt.

Practical Example A: Drop Shipping / Trader Model

  • Supplier (A): Karnataka
  • Trader (B): Maharashtra
  • Customer (C): Karnataka

B instructs A to deliver goods directly to C.

Confusion:
Since goods move within Karnataka, shouldn't A charge CGST + SGST?

Correct Approach:
From A’s perspective:

  • Billing is done to B (Maharashtra).
  • Delivery is on B’s instruction.
  • POS = B’s location (Maharashtra).
  • Tax to charge = IGST

Outcome:
Even though goods never left Karnataka, IGST applies because Bill-To state ≠ Ship-To state.

3. Section 10(1)(c): The “No Movement” Rule

The Law:

"Where the supply does not involve movement of goods… the place of supply shall be the location of such goods at the time of delivery to the recipient."

Plain English:

If the goods are already at a location and no movement happens,
POS = where the goods physically are.

Practical Example: Selling Leased Assets

  • Lessor: Delhi
  • Lessee: Haryana
  • Asset: A generator already installed at the Haryana site

Client decides to buy the generator without moving it.

Solution:

  • POS = Haryana (location of the goods)

Tax = IGST (Delhi → Haryana)

4. Section 10(1)(ca): The “Unregistered Person” Rule

The Law:

For supplies to unregistered persons (B2C), the POS is based on the address recorded on the invoice.

Plain English:

If the buyer is unregistered, the invoice address determines the POS—even if billing and shipping differ.

Practical Example:

An unregistered individual in Singapore orders a saree from your Bangalore store but asks for delivery to their sister in Bangalore.

Confusion:
Is this an export? Should IGST be charged?

Correct Solution:

  1. Not an export (goods did not leave India).
  2. Buyer is unregistered.
  3. As per Circular 209/3/2024, you should record the delivery address on the invoice.

Tax: CGST + SGST (Bangalore → Bangalore)

Why?
For unregistered persons, the law “deems” the delivery address as the invoice address to ensure tax flows to the actual consumption state.

5. Section 10(1)(d): The “Installation/Assembly” Rule

The Law:

"Where the goods are assembled or installed at site, the place of supply shall be the place of such installation or assembly."

Plain English:

If goods require installation to complete the supply, POS = installation site.

Practical Example: Office Fit-outs

  • Supplier: Chennai
  • Client: Hyderabad
  • You ship workstation components and assemble them in Hyderabad.

Solution:

  • POS = Hyderabad (installation site)
  • Tax = IGST (Tamil Nadu → Telangana)

Twist Scenario:

Supplier and Buyer both in Chennai, but installation is in Bangalore.

  • POS = Bangalore
  • Tax = IGST (Chennai → Bangalore)

Even though both GST registrations are in Chennai, the supply is consumed in Bangalore.

6. Section 10(1)(e): The “On Board” Rule

The Law:

"Where goods are supplied on board a conveyance… the place of supply shall be the location at which such goods are taken on board."

Plain English:

For trains, flights, buses—POS is where the goods were loaded onto the vehicle.

Practical Example: In-Flight Meal

  • Airline registered in Delhi
  • Instant noodles loaded onto aircraft in Mumbai
  • Flight goes to Bangalore
  • Passenger buys noodles while flying over Goa

Solution:

  • POS = Mumbai (point of loading)
  • Tax = CGST + SGST (if airline registered in Maharashtra)
    OR
    IGST (if billing is from Delhi)

Summary Table

Section

Scenario

Golden Rule

10(1)(a)

Movement of goods

Where the movement ends

10(1)(b)

Bill-to-Ship-to

Look at the “Biller’s” location

10(1)(c)

No movement

Where the goods physically sit

10(1)(ca)

Unregistered person

Use the invoice address (delivery address)

10(1)(d)

Installation/assembly

Installation site

10(1)(e)

On-board supply

Place where goods were loaded

Conclusion

Section 10 of the IGST Act, 2017 forms the backbone of GST compliance.
It ensures that GST reaches the correct consuming State, maintaining the integrity of India’s destination-based taxation structure.

Determining the Place of Supply can be confusing—especially for Bill-to-Ship-to transactions and the recent unregistered person rule. But with the right understanding and practical examples, compliance becomes simpler and more accurate.

Use this guide as your first reference point whenever you doubt the correct POS for a transaction.

Until next time, keep learning… keep questioning.
— Your CA in the Making :)


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