CGST and SGST, or IGST? How place of supply decides it

The single most common GST mistake on a small company's invoices is not the rate — it is charging CGST and SGST when the sale was inter-state, or IGST when it was not. The deciding question is the place of supply, and for most invoices it has a short answer.

By the Workdome team · 13 October 2026 · 6 min read

The rule in one line

If the place of supply is in the same state as your registration, charge CGST and SGST, half each. If it is in a different state, charge IGST at the full rate. Everything below is about working out where the place of supply is.

Goods

• Delivered to the customer: where the movement of the goods ends. Ship from Kochi to a customer in Bengaluru and it is IGST.
• Collected over the counter: where the goods are handed over. A customer from Tamil Nadu buying at your Kerala shop pays CGST and SGST — their home state does not matter.
• Billed to one party, shipped to another: the location of the party you bill, not the delivery address.

Services

For services between two parties in India, start with who the customer is:

• Registered business customer: the customer's registered location. This covers most business-to-business invoices — a Kochi company invoicing a Pune company for software or consulting charges IGST.
• Unregistered customer: the customer's address on your records, or your own location if you have none.

Then check whether one of the exceptions applies, because they override the default:

• Services related to property — renting, repairs, architecture: where the property is.
• Services performed in person — restaurants, beauty and wellness, treatment: where the service is actually performed.
• Training: the customer's location if they are registered; otherwise where the training happens.
• Events and admissions: where the event takes place.

The exceptions are why a hotel in Kerala charges CGST and SGST to a guest from Karnataka, even when the guest's company is registered in Bengaluru.

Five situations that trip people up

1. The customer's GSTIN is in another state, but the work is on your premises. If it is a performance-based or property service, the exception decides, not the GSTIN.
2. A branch in another state. Each registration is a separate taxpayer, so supplies between your own branches in different states are inter-state.
3. SEZ customers. Supplies to a unit in a Special Economic Zone are treated as inter-state even when the SEZ is in your own state.
4. The customer's state is missing. An invoice raised without the customer's state is a guess. Capture it when you create the customer, not at month end.
5. Correcting the wrong tax. If you charged CGST and SGST and it should have been IGST, you do not simply pay the difference — you pay IGST and claim a refund of what you paid wrongly. Getting it right on the invoice is far cheaper.

How Workdome handles it

Workdome decides CGST and SGST or IGST on every invoice and bill at the moment it is raised, from your company's state and the customer's or vendor's state — and it refuses to raise the invoice if either state is missing, which closes the most common source of error. That covers the default rules above. For the exceptions — property, in-person services, events — agree the treatment with your CA before you bill.

Because the tax is decided per transaction, GSTR-1 and GSTR-3B are built from the ledger rather than a month-end spreadsheet, and come out as reports and GSTN-format JSON. You file on the GST portal, record the return as filed in Workdome, and that month is locked against changes.

This article explains the general place-of-supply rules in sections 10 and 12 of the IGST Act as of 13 October 2026. It is not tax advice; confirm your position with a chartered accountant.