Section 13 fixes the place of supply when the supplier or the recipient is outside India. It decides whether a service is an export (place of supply outside India) or an import (place of supply in India), and so whether it is zero-rated or taxed.
Key points
- Under section 13(2) of the IGST Act, 2017 the place of supply of a cross-border service is the location of the recipient, unless a special rule in sub-sections (3) to (13) applies.
- Section 13(8)(b), which made an intermediary's place of supply its own location, was omitted by the Finance Act, 2026 from 30.03.2026; intermediary services now follow the recipient-location rule and can qualify as exports.
- Before its omission, section 13(8)(b) was upheld by the Gujarat High Court (Material Recycling Association, 2020) and by the Bombay High Court (Dharmendra M. Jani, 2023), the latter confining it to the IGST Act.
- Section 13(9), a destination rule for transport of goods, was omitted from 01.10.2023; such services now follow section 13(2).
- Online information and database access or retrieval services are supplied at the recipient's location; the recipient is deemed to be in India if any two of seven indicators point there (section 13(12)).
The provisions
13(1)–(2)Scope and the general rule
Statutory text
(1) The provisions of this section shall apply to determine the place of supply of services where the location of the supplier of services or the location of the recipient of services is outside India.
(2) The place of supply of services except the services specified in sub-sections (3) to (13) shall be the location of the recipient of services:
Provided that where the location of the recipient of services is not available in the ordinary course of business, the place of supply shall be the location of the supplier of services.
13(3)–(7)Performance, property, events; several locations
Statutory text
(3) The place of supply of the following services shall be the location where the services are actually performed, namely:-
(a) services supplied in respect of goods which are required to be made physically available by the recipient of services to the supplier of services, or to a person acting on behalf of the supplier of services in order to provide the services:
Provided that when such services are provided from a remote location by way of electronic means, the place of supply shall be the location where goods are situated at the time of supply of services:
1[Provided further that nothing contained in this clause shall apply in the case of services supplied in respect of goods which are temporarily imported into India for repairs or for any other treatment or process and are exported after such repairs or treatment or process without being put to any use in India, other than that which is required for such repairs or treatment or process;]
(b) services supplied to an individual, represented either as the recipient of services or a person acting on behalf of the recipient, which require the physical presence of the recipient or the person acting on his behalf, with the supplier for the supply of services.
(4) The place of supply of services supplied directly in relation to an immovable property, including services supplied in this regard by experts and estate agents, supply of accommodation by a hotel, inn, guest house, club or campsite, by whatever name called, grant of rights to use immovable property, services for carrying out or co-ordination of construction work, including that of architects or interior decorators, shall be the place where the immovable property is located or intended to be located.
(5) The place of supply of services supplied by way of admission to, or organisation of a cultural, artistic, sporting, scientific, educational or entertainment event, or a celebration, conference, fair, exhibition or similar events, and of services ancillary to such admission or organisation, shall be the place where the event is actually held.
(6) Where any services referred to in sub-section (3) or sub-section (4) or sub-section (5) is supplied at more than one location, including a location in the taxable territory, its place of supply shall be the location in the taxable territory.
(7) Where the services referred to in sub-section (3) or sub-section (4) or sub-section (5) are supplied in more than one State or Union territory, the place of supply of such services shall be taken as being in each of the respective States or Union territories and the value of such supplies specific to each State or Union territory shall be in proportion to the value for services separately collected or determined in terms of the contract or agreement entered into in this regard or, in the absence of such contract or agreement, on such other basis as may be prescribed.
1. Substituted for " Provided further that nothing contained in this clause shall apply in the case of services supplied in respect of goods which are temporarily imported into India for repairs and are exported after repairs without being put to any other use in India, than that which is required for such repairs; " by s. 6 of the Integrated Goods and Services Tax (Amendment) Act, 2018 (No. 32 of 2018) - Brought into force w.e.f. 01st February, 2019.
What it means
- (3) Where actually performed — (a) services on goods the recipient makes physically available to the supplier (repair, testing, processing); if performed remotely by electronic means, where the goods are. The second proviso excludes goods temporarily imported for repair, treatment or process and re-exported without other use in India (as substituted from 01.02.2019). (b) Services requiring the physical presence of the recipient or a person acting for it.
- (4) Immovable property — where the property is or is intended to be located.
- (5) Admission to or organisation of events, and ancillary services — where the event is actually held.
- (6) A service under (3) to (5) supplied at several locations including one in India — the location in India.
- (7) A service under (3) to (5) supplied in several States or Union territories — each of them, in proportion to the value attributable to each.
13(8)Supplier's location: banking to account holders, hiring of transport — and formerly intermediaries
Statutory text
(8) The place of supply of the following services shall be the location of the supplier of services, namely:-
(a) services supplied by a banking company, or a financial institution, or a non-banking financial company, to account holders;
3[(b) ****]
(c) services consisting of hiring of means of transport, including yachts but excluding aircrafts and vessels, up to a period of one month.
Explanation . - For the purposes of this sub-section, the expression,-
(a) "account" means an account bearing interest to the depositor, and includes a non-resident external account and a non-resident ordinary account;
(b) "banking company" shall have the same meaning as assigned to it under clause (a) of section 45A of the Reserve Bank of India Act, 1934;
(c) "financial institution" shall have the same meaning as assigned to it in clause (c) of section 45-I of the Reserve Bank of India Act, 1934;
(d) "non-banking financial company" means, -
( i ) a financial institution which is a company;
(ii) a non-banking institution which is a company and which has as its principal business the receiving of deposits, under any scheme or arrangement or in any other manner, or lending in any manner; or
( iii ) such other non-banking institution or class of such institutions, as the Reserve Bank of India may, with the previous approval of the Central Government and by notification in the Official Gazette, specify.
3. Omitted by section 157 of The Finance Act, 2026 (No. 4) of 2026 dated 30.03.2026.
What it means
For supplies made up to 29.03.2026, clause (b) still decides the place of supply: the omission operates prospectively, and the provision as it stood was upheld in the two High Court decisions below.
- (a) Services by a banking company, financial institution or NBFC to account holders — the supplier's location. The Explanation limits "account" to interest-bearing accounts, including NRE and NRO accounts.
- (b) Intermediary services — omitted from 30.03.2026 by section 157 of the Finance Act, 2026. Until then, an intermediary's place of supply was its own location, so an Indian intermediary acting for a foreign principal could not export. From 30.03.2026 intermediary services follow sub-section (2) — the recipient's location.
- (c) Hiring of means of transport, including yachts but excluding aircraft and vessels, for up to one month — the supplier's location.
Cases on this provision
Material Recycling Association of India v Union of India
R/Special Civil Application 13238 of 2018 · 24.07.2020 · Gujarat High Court, Division Bench (J.B. Pardiwala, Bhargav D. Karia JJ.)
- Facts
- Members of the association acted as agents for foreign suppliers of recycled material and scrap, arranging sales to Indian buyers and earning commission in foreign exchange. They challenged section 13(8)(b), which made the place of supply of their services India and so denied export status.
- Held
- Section 13(8)(b) is valid. Parliament had competence to frame the place-of-supply rule; treating the intermediary's location as the place of supply was a legislative choice carried over from the service-tax regime, not an extra-territorial levy; and intermediary services do not become exports merely because the principal is abroad.
- Since then
- Clause (b) was omitted by the Finance Act, 2026 from 30.03.2026.
- Here
- Governs intermediary services supplied before 30.03.2026.
Dharmendra M. Jani v Union of India
W.P. 2031 of 2018 · 18.04.2023 · Bombay High Court, Division Bench (Ujjal Bhuyan, Abhay Ahuja JJ.) split on 09.06.2021; third judge G.S. Kulkarni J.
- Facts
- The petitioner provided marketing and promotion services to overseas customers to facilitate their sales of goods, earning commission from the foreign principals. He challenged sections 13(8)(b) and 8(2) as taxing an export.
- Held
- The Division Bench split: Bhuyan J. held section 13(8)(b) ultra vires and unconstitutional; Ahuja J. upheld it. On reference, Kulkarni J. held sections 13(8)(b) and 8(2) valid and constitutional provided they are confined to the IGST Act — they cannot be applied to levy tax on such services under the CGST and Maharashtra GST Acts.
- Since then
- Clause (b) was omitted by the Finance Act, 2026 from 30.03.2026.
- Here
- For periods before 30.03.2026, the Bombay view leaves intermediary services to foreign principals outside CGST and SGST — a point of difference with the Gujarat decision.
13(9)–(13)Transport, passengers, services on board, online services; power to notify
Statutory text
(9) 2[* * * *]
(10) The place of supply in respect of passenger transportation services shall be the place where the passenger embarks on the conveyance for a continuous journey.
(11) The place of supply of services provided on board a conveyance during the course of a passenger transport operation, including services intended to be wholly or substantially consumed while on board, shall be the first scheduled point of departure of that conveyance for the journey.
(12) The place of supply of online information and database access or retrieval services shall be the location of the recipient of services.
Explanation .-For the purposes of this sub-section, person receiving such services shall be deemed to be located in the taxable territory, if any two of the following non-contradictory conditions are satisfied, namely:-
(a) the location of address presented by the recipient of services through internet is in the taxable territory;
(b) the credit card or debit card or store value card or charge card or smart card or any other card by which the recipient of services settles payment has been issued in the taxable territory;
(c) the billing address of the recipient of services is in the taxable territory;
(d) the internet protocol address of the device used by the recipient of services is in the taxable territory;
(e) the bank of the recipient of services in which the account used for payment is maintained is in the taxable territory;
(f) the country code of the subscriber identity module card used by the recipient of services is of taxable territory;
(g) the location of the fixed land line through which the service is received by the recipient is in the taxable territory.
(13) In order to prevent double taxation or non-taxation of the supply of a service, or for the uniform application of rules, the Government shall have the power to notify any description of services or circumstances in which the place of supply shall be the place of effective use and enjoyment of a service.
2. Omitted by s. 162 of The Finance (No. 8) Act, 2023 (No. 08 of 2023) - Brought into force w.e.f. 01st October, 2023 vide Notification No. 28/2023-C.T., dated 31st July, 2023.
What it means
- (9) Transport of goods — omitted from 01.10.2023 (Finance Act, 2023, s. 162). It made the destination of the goods the place of supply; transport services now follow sub-section (2).
- (10) Passenger transport — where the passenger embarks for a continuous journey.
- (11) Services on board a conveyance during passenger transport, including services meant to be used wholly or substantially on board — the first scheduled point of departure.
- (12) Online information and database access or retrieval services — the recipient's location. The recipient is deemed to be in India if any two of seven indicators are in India: address presented online, card issuing country, billing address, IP address, bank, SIM country code, or landline. This feeds the liability of foreign suppliers under section 14.
- (13) The Government may, on the Council's recommendation, notify a different place of supply for any service or circumstance to prevent double taxation or non-taxation, or for uniform application of the rules.
Statutory text as published on the CBIC tax information portal, as on 03.10.2026; the numbered notes record each amendment. Official source
Common questions
- What is the place of supply of services exported from India?
- Under section 13(2) of the IGST Act, the location of the recipient outside India, unless a special rule applies — for example, services on goods physically supplied in India, or services relating to immovable property in India.
- Are intermediary services to foreign clients an export now?
- From 30.03.2026, yes, if the other export conditions are met: the Finance Act, 2026 omitted section 13(8)(b), so the place of supply is the recipient's location. For earlier supplies, the place of supply was the intermediary's own location.
- Was section 13(8)(b) held unconstitutional?
- No. The Gujarat High Court upheld it in 2020; the Bombay High Court (third judge, 2023) upheld it but confined it to the IGST Act, so that it cannot found a CGST/SGST levy.
- How is a foreign recipient's location decided for online services?
- Under section 13(12), a recipient is deemed to be in India if any two of seven indicators point to India — such as billing address, card issuing country, IP address or SIM country code.
Commentary and case notes checked against the judgments and CBIC sources on 04.10.2026.
What it means
Section 13 applies when the supplier or the recipient is located outside India; if both are in India, section 12 applies.
The general rule is the recipient's location — the basis of export of services under section 2(6). If the recipient's location is not available in the ordinary course of business, the supplier's location is used.