IGST or CGST? Place of supply on a travel invoice

You're a Pune-based operator. A Delhi client books a Kerala houseboat package. You raise the invoice and pause: IGST, or CGST plus SGST? The destination is Kerala, the client is in Delhi, your registration is in Maharashtra. None of those three facts decides it.

This confuses even operators who've been billing for years, because the intuitive answer, "charge tax where the trip happens," is wrong for a package sold as principal. The rule that decides IGST or CGST runs off your client's location and registration status, not the itinerary. Get the head wrong and it isn't a same-return fix: you end up paying the correct tax again, out of pocket, while you chase a refund on the amount you got wrong.

The one-line rule: who decides, not where the trip goes

For a tour operator selling a package as principal, the tax head on the invoice is decided by the recipient's location and GST registration status, not by where the trip actually goes. Under Section 12(2) of the IGST Act, a registered recipient's location fixes the place of supply, and if that state differs from your own registered state, the invoice carries IGST, regardless of whether the trip runs to Kerala, Kazakhstan or next door (TaxGuru: place of supply of services under GST). An unregistered client's address does the same job, but only if you actually captured it. No address on record, no inter-state place of supply: it defaults to your own state, CGST plus SGST instead.

One genuine exception to this recipient-first logic is worth flagging before you read further: a hotel or accommodation cost billed as its own discrete line, not folded into the package price, follows the destination state instead. That case is covered further down, and it's the one place here where you should double-check with your CA before committing to an invoicing format.

The four cases, one decision table

Four situations cover almost every travel invoice you'll ever raise. Screenshot this table.

Scenario	Recipient's status	Tax head	Why
Unregistered client, different state, address on file	e.g. Delhi, address recorded on the invoice	IGST	Sec 12(2)(b): recorded address sets place of supply
Registered B2B client, different state	e.g. Delhi GSTIN on invoice	IGST	Sec 12(2)(a): registered recipient's location always governs
Hotel/accommodation billed as a discrete line	Any	Follows the property's state	Sec 12(3): immovable-property carve-out overrides recipient location
Itinerary partly abroad, client based in India	e.g. Delhi client, Dubai leg included	Same as client's status above	Sec 13 doesn't engage unless supplier or recipient is outside India

The first two rows are the ones operators get wrong most often, and they hinge on one thing: whether you actually recorded the client's address.

Selling a Kerala package to a Delhi client: unregistered vs. registered

Say you run a Pune-based agency and sell a ₹1,85,000 Kerala houseboat package to a Delhi client.

If that client is GST-registered and hands you a Delhi GSTIN for the invoice, the answer is settled: IGST, full stop. Section 12(2)(a) says the place of supply is the registered recipient's location, and Delhi differs from your Maharashtra registration, so the supply is inter-state no matter what the package itself covers (TaxGuru).

If the client is an unregistered individual, it depends on whether you captured their Delhi address on the booking form or invoice. If you did, Section 12(2)(b) treats that address as the place of supply and you charge IGST, same as the B2B case. If you didn't capture any address, the rule defaults to your own location, and the invoice carries CGST plus SGST even though the client is sitting in Delhi.

Careful: This makes address capture a tax decision, not just a form field. If your booking form doesn't force a billing address before the invoice is cut, you're leaving the tax head to default by accident. Make the field mandatory before you standardise your invoice format.

Most agencies that get this wrong aren't confused about the law. They just never recorded the address, defaulted to CGST+SGST out of habit, and never noticed the client was actually out of state.

When the hotel or transport itself is billed in a state you're not registered in

If you bill a hotel or accommodation component as its own line item, separate from the package price, the place of supply for that line follows the property's location, not the client's. Section 12(3) of the IGST Act carves out immovable-property services for this: where the service relates to accommodation and the property is in India, the property's state governs, overriding the general recipient-location rule (TaxGuru).

This is genuinely the murkiest corner of the topic, unsettled as of August 2026. Practitioner commentary is split on whether a composite package, sold at one price with the hotel folded in, should stay under the recipient-location rule (Section 12(2)) or get pulled into the destination-based rule (Section 12(3)) because accommodation is part of what's delivered. There's no settled, uniform answer for that composite case.

What's clearer: the moment you invoice the hotel cost as a discrete, separately billed line rather than a folded-in package price, it behaves like an accommodation supply and follows the destination state. Do that often enough in a state where you don't hold a GST registration and you may be tripping a registration requirement there too, a separate question from the one this post covers. Check your GST registration thresholds before billing accommodation lines separately in destination states, and get your CA to sign off on the package-versus-line-item structure either way.

Part of the itinerary is abroad: the Dubai leg changes nothing

Not for a package sold to a domestic client. If your Pune agency sells a Delhi client a package with three nights in Dubai, the place-of-supply analysis still runs off Sections 12(2) and 12(3): registered client, unregistered client with a recorded address, or a discretely billed accommodation line. A leg of the trip happening outside India doesn't pull in a different rule.

The rule that would change things, Section 13 (place of supply where the supplier or the recipient is located outside India), only engages when one of those two parties, not a destination on the itinerary, is actually outside India. A Pune operator selling to a Delhi client stays a fully domestic transaction under Section 12, even if every night of the trip is spent abroad. That's different from genuinely billing a foreign client, where the recipient itself sits outside India, a separate scenario covered in the post on invoicing inbound tours for foreign clients.

Why the wrong head costs you twice: cross-utilisation and the stranded CGST balance

If your agency sells mostly outbound and long-distance packages to registered or address-captured clients, most of your output tax is IGST. Your input credit on local supplier bills, hotels, vehicles, guides in your own state, arrives largely as CGST and SGST. Rule 88A of the CGST Rules says any IGST credit in your ledger must be fully used against IGST output liability first, and only the leftover can then go toward CGST or SGST, in either order. CGST credit can't pay off SGST liability directly, or the other way round (TaxGuru: Rule 88A).

Run that pattern for a few months and the CGST/SGST credit sits idle on the books while you're still paying cash to settle IGST liability on new invoices. Charging the wrong head in the first place compounds it: the mismatch between what you owe and what you've paid now sits under the wrong bucket entirely.

The fix: PMT-09 if it's still sitting there, a refund claim if it's already spent

There are two remedies here, and which one applies depends entirely on whether the wrongly-paid amount has already been used to settle a liability.

If it's still sitting unutilised in your electronic cash ledger, meaning you paid CGST+SGST in but haven't yet debited it against a return, you can move it across heads (say, CGST/SGST to IGST) using Form PMT-09, without a separate refund application. It's a same-ledger transfer, not a refund.

If the amount has already been used to discharge a liability, PMT-09 doesn't help:

1. Pay the correct tax under the right head. Under Section 77 of the CGST Act and Section 19 of the IGST Act, no interest is charged on this correct-head payment, even though it's arriving late (TaxGuru: GST refund for tax paid under the wrong head).
2. Separately claim a refund of the amount wrongly paid, filed electronically via Form GST RFD-01, within two years of the date the correct-head tax was paid.

Most operators discover this error late, months after the invoice, once a client's accountant flags a mismatch or a reconciliation throws up the state code. By then the wrong-head amount is almost always already spent, so the refund route is the one you'll actually need, not PMT-09.

Example: You charged CGST+SGST of ₹9,250 on a package that should have carried IGST. You've since filed the return and that amount is already offset against output liability. You now pay ₹9,250 IGST correctly (no interest under Section 77/19), and file Form RFD-01 to claim back the wrongly paid CGST+SGST within two years of the date you paid the correct IGST amount.

What this looks like when the department notices first: the ASMT-10

If you don't catch the mismatch yourself, the department's scrutiny process can. Form GST ASMT-10 is a scrutiny notice issued under Section 61 of the CGST Act, following the procedure in Rule 99, when a proper officer spots a discrepancy on reviewing your filed returns. For a place-of-supply error, that typically means your GSTR-1 shows a state code and tax head that doesn't match the recipient's declared state, or doesn't reconcile against GSTR-3B. You reply using Form ASMT-11 (TaxGuru: Form GST ASMT-10).

Nobody budgets for paying tax twice on the same invoice, but that's exactly what happens once the wrong-head amount is already spent and an ASMT-10 (or your own reconciliation) catches it after the fact. Checking the place of supply line by line before you file GSTR-1 and GSTR-3B is a lot cheaper than catching it at RFD-01 stage.

Common questions

Can I adjust IGST with CGST and SGST?

Yes, but only in one direction, and only after your IGST credit is exhausted first. Rule 88A requires available IGST input credit to fully offset IGST output liability before the remainder can be applied to CGST or SGST, in either order. CGST and SGST credit cannot be used to pay each other off directly.

What if CGST and SGST were charged instead of IGST?

If the amount is still unutilised in your cash ledger, move it to IGST using Form PMT-09. If it's already settled a liability, pay the correct IGST amount (no interest under Section 77/19), then claim back the wrongly paid CGST+SGST via Form RFD-01 within two years.

What is the place of supply in case of hotel accommodation?

For a hotel or accommodation service billed as its own discrete line, the place of supply is the property's own location, under Section 12(3), not the recipient's location. It's genuinely disputed how this interacts with a composite package price, so confirm your specific invoicing structure with your CA.

The short version

• The place of supply for a package you sell as principal runs off your client's location and GST registration status (Section 12(2)), not the trip's destination.
• Registered B2B client in a different state: always IGST. Unregistered client: IGST only if their address is on record, otherwise it defaults to your own state's CGST+SGST.
• A discretely billed hotel/accommodation line follows the property's state instead (Section 12(3)), separate from the package-level rule, and is the one genuinely contested case here.
• A partly-abroad itinerary sold to a domestic client stays a domestic transaction. Section 13 only applies when the supplier or the recipient is actually outside India.
• Getting the head wrong isn't a same-return fix: pay the correct tax again (no interest under Section 77/19), then claim the wrongly paid amount back via RFD-01 within two years, or use PMT-09 if it's still unspent in your cash ledger.
• IGST-heavy sales against CGST/SGST-heavy input credit is a common Indian travel-agency pattern, and Rule 88A means that mismatch doesn't self-correct: check it every filing cycle.
• Confirm every claim here against current CBIC guidance and your own filings with your CA before you standardise an invoice format on it.