Place of Supply for immovable property

This query is : Resolved

Quick Summary

When renting out immovable property like a shop, the place of supply is determined by the property's location. This means that even if the recipient is in a different state, if the property itself is within Karnataka, the supply is considered intra-state. Therefore, CGST and SGST will apply, not IGST.

R Hiremath

R Hiremath (Querist)
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11 May 2025 Sir, I have query Mr. A registered Dealer in Karnataka who give rent of shop & machinery in Karnataka to Mr. B who is a Registered dealer from Andhra Pradesh. in This case is IGST applicable or CGST & SGST ?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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11 May 2025 CGST +SGST

CA Rashmi Gandhi

CA Rashmi Gandhi (Expert)
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12 May 2025 Under Section 12(3) of the IGST Act, when the supply involves immovable property (like shops), the place of supply is where the property is located, regardless of the recipient’s location.

So here’s what that means:

Since the shop is in Karnataka,
and Mr. A is also in Karnataka,
even though Mr. B is in Andhra,
the place of supply is Karnataka,
and Mr. A’s location is Karnataka too.

💡 Conclusion: This is an intra-State supply, and hence…

🔹 CGST + SGST will apply, not IGST.

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