A qualifying on-board service uses the journey departure point
Where supplier and recipient locations are in India and section 12(10) of the IGST Act governs, the place of supply of services on board a conveyance is the location of its first scheduled point of departure for the journey. The provision includes vessels, aircraft, trains and motor vehicles. A customer’s later boarding point is not automatically that first scheduled point.
Read the applicable text: CBIC IGST Act: sections 7, 8 and 12(10).
Classify the service before applying this rule
Determine what is actually supplied and the applicable place-of-supply provision. Passenger transportation, catering, telecommunications and other specifically classified supplies require their own legal analysis. Do not label every transaction occurring during travel an on-board service under subsection (10), or apply the goods rule to services merely because an invoice includes a physical item.
Define and document the journey
Retain the schedule, itinerary, conveyance identification, service description and contract. Establish the actual journey whose first scheduled departure is relevant. A stop, passenger change or invoice date does not automatically create a new journey. Where examples use separately established journeys, that is an explicit factual assumption, not an invented universal rule that every leg resets the place of supply.
Separate place of supply from supplier location
Having identified the subsection (10) location, compare it with the legally established supplier location under sections 7 and 8. The conveyance’s current position does not itself establish the supplier’s location. The examples assume ordinary domestic transactions, no SEZ or international special treatment and a qualifying service classification assumed for the fictional facts.
Keep tax rate and credit independent
All tax calculations below assume a hypothetical 18% rate only to illustrate arithmetic; this is not a classification or rate prescription for travel, catering or connectivity. Correct place of supply does not by itself establish a corporate buyer’s credit entitlement. Review valuation, rate and ITC under their own applicable requirements.
Reconcile at service and journey level
Map each invoice to the service and journey evidence, supplier GSTIN, departure location, taxable value and tax heads. Do not allocate the same service’s value across States merely by travel distance. Mixed invoices and corrections need their own evidence rather than forcing everything into one departure-point formula.
Six worked illustrations
All facts and amounts are fictional. Calculations illustrate the stated assumptions, not a predetermined legal outcome.
Illustrative example 1: Departure differs from boarding
Assume a qualifying subsection (10) service, supplier location Maharashtra, journey first scheduled departure Delhi and customer boarding in Uttar Pradesh. On taxable value ₹20,000 at the assumed rate, place of supply is Delhi and IGST ₹3,600. The customer’s later boarding point does not replace Delhi on these facts.
Illustrative example 2: Same-State comparison
Supplier location and first scheduled departure are both Maharashtra. The qualifying service is provided after the train enters Gujarat. On taxable value ₹10,000, assumed tax is ₹1,800, split CGST ₹900 and Maharashtra SGST ₹900 on the ordinary domestic facts.
Illustrative example 3: Two separately established journeys
A Delhi supplier invoices qualifying services ₹30,000 for a journey first departing Delhi and ₹20,000 for another independently established journey first departing Maharashtra. At the assumed rate, the first produces CGST ₹2,700 and SGST ₹2,700, while the second produces IGST ₹3,600. Total tax is ₹9,000. The separate journey facts must be proved.
Illustrative example 4: Tax-inclusive consideration
For a qualifying service, assumed tax-inclusive consideration ₹11,800 at 18% gives taxable value ₹10,000 and tax ₹1,800. The calculation alone does not choose the tax heads; supplier location and the relevant departure point remain necessary.
Illustrative example 5: Separate mixed invoice components
An invoice totals taxable value ₹10,000, comprising an assumed qualifying on-board service ₹6,000 and a separately classified passenger-transport component ₹4,000. Only ₹6,000 enters this subsection (10) working, producing assumed tax ₹1,080. Determine the ₹4,000 component’s treatment separately instead of assigning all ₹10,000 to subsection (10).
Illustrative example 6: Distance is not the allocation formula
A qualifying service has taxable value ₹50,000 and the journey travels 200 km in one State and 300 km in another. The route totals 500 km, but subsection (10) does not direct a 40:60 value allocation. At the assumed rate total tax is ₹9,000; determine its heads from the supported supplier and departure locations.
Ten-step verification table
| Step | Action | Evidence |
|---|---|---|
| 1 | Identify the actual service | Contract and supply description. |
| 2 | Check domestic scope | Supplier and recipient locations. |
| 3 | Select the correct provision | Subsection (10) versus other service rules. |
| 4 | Identify the relevant journey | Schedule and conveyance evidence. |
| 5 | Establish first scheduled departure | Itinerary and origin record. |
| 6 | Separate customer boarding | Passenger details without substituting the origin. |
| 7 | Establish supplier location | Relevant GSTIN and legal analysis. |
| 8 | Determine tax heads | Sections 7 and 8 comparison. |
| 9 | Verify value and rate separately | Classification and price evidence. |
| 10 | Close the invoice mapping | Service, journey, location and tax reconciliation. |
Sixteen practitioner FAQs
1. Which provision is examined?
IGST section 12(10).
2. What domestic-location condition is relevant?
Section 12 concerns cases where supplier and recipient locations are in India.
3. Does customer boarding necessarily set the place of supply?
Not for the assumed subsection (10) service.
4. Does the current State of the vehicle decide it?
Identify the first scheduled departure instead.
5. Is every travel-related service covered?
Classify the actual service under its applicable provision.
6. Can the goods loading-point rule simply be used?
No; goods and services have distinct rules.
7. Does each intermediate stop automatically start a new journey?
Do not infer that without examining the actual journey.
8. Why retain schedules?
They support the relevant departure and journey identity.
9. Can multiple separately established journeys need separate workings?
Yes, map each supported journey and supply.
10. Does conveyance location prove supplier location?
Not by itself.
11. Do kilometres determine a statutory value split here?
Subsection (10) does not prescribe that formula.
12. Is the example 18% a travel-service rate recommendation?
No. It is a hypothetical arithmetic input, not a verified service-specific rate.
13. Are mixed invoice components automatically one subsection (10) supply?
Determine classification and treatment separately.
14. Does this guide decide ITC eligibility?
No. Credit requires its own analysis.
15. Are SEZ and international examples included?
No; the worked cases expressly assume ordinary domestic treatment.
16. What completes the place-of-supply file?
Service classification, journey origin, supplier location and tax heads reconcile.