The loading point matters for an actual on-board goods supply
Section 10(1)(e) of the IGST Act identifies the place of supply of goods supplied on board a conveyance, including a vessel, aircraft, train or motor vehicle, as the location where those goods are taken on board. Do not substitute the buyer’s destination, the place of payment or the point where an invoice is printed without applying the relevant rule.
Read the applicable text: CBIC IGST Act: sections 7, 8 and 10(1)(e), contrasted with service rules.
Classify the supply before choosing the clause
Goods merely transported as cargo for delivery are not automatically goods supplied on board. Establish the actual transaction and distinguish goods from passenger transportation, catering or another service. On-board services have a different place-of-supply framework; do not transfer the goods loading-point rule to every service delivered during a journey.
Use batch evidence when goods are replenished
Link sales to stock loading records, conveyance identifiers and batch movements. Goods loaded at one stop and goods replenished later may have different relevant locations. A route crossing several States does not itself require allocating every sale by kilometres travelled. Resolve unidentified batch origins rather than assuming the first departure always controls goods.
Determine the tax heads separately
After establishing place of supply, compare it with the legally determined supplier location under sections 7 and 8. The examples assume an ordinary domestic registered-supplier transaction, an established supplier location and no SEZ, import, export or other special treatment. Do not infer supplier location solely from where a vehicle happens to be when a sale occurs.
Keep rate and credit analysis independent
A correct place of supply does not establish product classification, rate, valuation or recipient ITC entitlement. The examples use an assumed hypothetical 18% goods rate solely to demonstrate tax-head arithmetic. They do not classify food, refreshments, travel services or any actual product. Check any credit restrictions under their own provisions.
Close the sales and stock reconciliation
Match the supply document, batch loading point, supplier GSTIN, value and tax heads. Separate unsold stock and stock-transfer questions from actual sales. Where a prior invoice used the wrong tax head, analyse the supported correction process separately; the same aggregate tax amount does not make the incorrect head harmless.
Six worked illustrations
All facts and amounts are fictional. Calculations illustrate the stated assumptions, not a predetermined legal outcome.
Illustrative example 1: Different supplier and loading States
Assume supplier location Maharashtra and an actual on-board goods batch loaded in Delhi. A registered buyer’s journey ends in West Bengal. On ₹20,000 taxable value at the assumed 18% rate, place of supply is Delhi and IGST is ₹3,600 on these ordinary domestic facts. The destination does not replace the loading point.
Illustrative example 2: Same supplier and loading State
Supplier location and goods loading point are both Delhi. Goods are sold on board after the conveyance enters Rajasthan. On assumed taxable value ₹10,000, the 18% tax is ₹1,800, split CGST ₹900 and Delhi SGST ₹900 on the stated ordinary intra-State facts.
Illustrative example 3: Replenishment creates two batch records
A Delhi-located supplier sells assumed taxable goods from a Delhi-loaded batch worth ₹30,000 and a Maharashtra-loaded batch worth ₹20,000. The first produces CGST ₹2,700 and SGST ₹2,700; the second produces IGST ₹3,600 at the assumed rate. Total tax is ₹9,000, with batch attribution supporting the split.
Illustrative example 4: Tax-inclusive price is a separate calculation
A qualifying on-board goods sale has tax-inclusive price ₹11,800 at the assumed 18% rate. Taxable value is ₹10,000 and tax ₹1,800. Extracting tax correctly does not establish which head applies; loading-point and supplier-location evidence must still decide that question.
Illustrative example 5: Buyer addresses do not replace the selected rule
An established Maharashtra supplier sells two qualifying Delhi-loaded goods batches for ₹50,000 each to different registered business buyers. Total taxable value ₹1 lakh gives assumed IGST ₹18,000 on these facts. Different buyer destinations do not themselves split the loading-point place of supply.
Illustrative example 6: Loading is not proof of sale of every unit
One hundred units are loaded; eighty are sold and twenty remain. At assumed taxable selling price ₹500 per unit, actual sales value is ₹40,000 and assumed 18% output tax is ₹7,200. Do not use ₹50,000 and ₹9,000 merely because all units were loaded; any separate stock movement implications need their own analysis.
Ten-step verification table
| Step | Action | Evidence |
|---|---|---|
| 1 | Classify the actual supply | Goods versus service or cargo delivery. |
| 2 | Confirm statutory scope | Domestic facts and special-treatment screening. |
| 3 | Identify the supplier | Relevant GSTIN and legal location. |
| 4 | Identify each batch | Stock and conveyance references. |
| 5 | Prove the loading point | Dispatch and loading evidence. |
| 6 | Map on-board sales | Invoice and batch allocation. |
| 7 | Determine place of supply | Section 10(1)(e) memorandum. |
| 8 | Select the tax heads | Sections 7 and 8 comparison. |
| 9 | Check value and rate independently | Classification and price working. |
| 10 | Close stock and sales | Unsold units and tax reconciliation. |
Sixteen practitioner FAQs
1. Which clause addresses on-board goods?
IGST section 10(1)(e).
2. Which location does it identify?
Where the supplied goods are taken on board.
3. Does the purchaser’s destination automatically control?
Not under this selected goods rule.
4. Does the conveyance’s current State necessarily control?
Identify the loading point instead.
5. Is ordinary cargo delivery automatically an on-board sale?
No. Classify the transaction first.
6. Does this goods rule govern every on-board service?
No. Services require their applicable framework.
7. Why retain batch loading records?
Different batches may have different loading locations.
8. Must value be split by kilometres travelled?
Do not invent that method from this clause.
9. What determines inter-State versus intra-State treatment?
The relevant supplier-location and place-of-supply comparison, subject to the Act’s exceptions.
10. Does vehicle location prove supplier location?
Not by itself.
11. Are SEZ and international cases included in the examples?
No. They are expressly outside the assumed ordinary domestic cases.
12. Does the assumed 18% classify refreshments?
No. It is a hypothetical arithmetic input, not a verified product-specific rate.
13. Does correct place of supply guarantee ITC?
Credit eligibility is a separate inquiry.
14. Are all loaded units necessarily sold?
Reconcile actual sales and unsold stock separately.
15. Is a correct total tax enough if the heads are wrong?
Review the actual correction route and consequences separately.
16. What closes the place-of-supply file?
Each sale links to its batch loading point, supplier and tax-head working.
Official sources
CBIC IGST Act: sections 7, 8 and 10(1)(e), contrasted with service rules