Wrong GST Place of Supply? Your Invoice Gets Rejected

GST place of supply rules decide which state collects your tax. Get it wrong on an invoice and you pay twice — once to the wrong state, once to the right one. Here's how to get it right.

Here's what happened: GST law uses 'place of supply' rules (Sections 10–13, CGST Act) to decide which state's government collects tax on every transaction, goods or services.. For cross-border and intermediary services — agents, brokers, commission earners — Indian GST applies even on overseas clients if the supplier is registered in India.. Multi-GSTIN businesses billing from the wrong state registration can invalidate a buyer's Input Tax Credit claim, creating financial disputes between trading partners..

What you should do: Check every interstate GST invoice: confirm the 'Place of Supply' state code matches where your service is consumed or goods are delivered — not just your registered office.. If you earn commission or act as an agent for foreign clients, consult a GST practitioner about intermediary classification — do not assume export exemption applies automatically.. Compare your GSTIN used for billing against the state where your buyer is located; a mismatch can block their ITC claim and trigger a credit note dispute..

If you bill the same client from two different state GSTINs in one month, the place of supply must be determined separately for each invoice — one wrong entry voids the buyer's entire ITC for that bill.

For readers weighing their credit and loan options, our personal loan guide and CIBIL score resources put this update in context.