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Microlesson · 5-min read

Place of Supply - Banking, Financial, Insurance and Government Advertisement Services [Sections 12(12), 12(13), 12(14) IGST Act]

# Place of Supply: Banking, Financial, Insurance & Govt. Advertisement

## (A) Banking & Financial Services (incl. Stock Broking) — Sec 12(12)

ScenarioPlace of Supply
Recipient's address available with supplierLocation of recipient
Recipient's address NOT availableLocation of supplier

Logic: Banks may serve walk-in customers (e.g., DD purchase, currency exchange) without recording address. In such cases, default to supplier's location.

## (B) Insurance Services — Sec 12(13)

ScenarioPlace of Supply
AlwaysLocation of recipient

No carve-out for missing address — insurance always requires recipient identification.

## (C) Advertisement to Central/State Govt/UT/Local Authority/Statutory Body — Sec 12(14)

ScenarioPlace of Supply
AlwaysEach State/UT where the advertisement is played/run/broadcasted

This means a single contract for nationwide government advertising is proportionally apportioned across all the States/UTs where it actually runs.

Worked example

### Example 1

Banking — Example 1: Mr. Shyam (Jaipur) travels to Delhi, buys a DD from a Delhi bank to pay college fees, and the bank issues the DD without KYC.

Solution: Recipient address not available → PoS = Delhi (location of supplier).

### Example 2

Insurance — Example 2: Mr. Ron (Jaipur) buys a term insurance policy from TATA AIA (Mumbai) for an annual premium of ₹15,000.

Solution: PoS = Jaipur (location of recipient). TATA AIA charges IGST (inter-State).

⚠️ Common exam mistakes

  • Applying the banking address-not-available exception to insurance — insurance is always recipient-based.
  • Treating Government advertisement as a single PoS — it must be proportionally allocated across each State/UT where the ad runs.
  • Forgetting that for walk-in banking customers without KYC, PoS shifts to supplier.
Bare-Act text Sections 12(12), 12(13), 12(14) · IGST Act, 2017 · click to expand
Section 12(12), IGST Act: The place of supply of banking and other financial services, including stock broking services to any person shall be the location of the recipient of services on the records of the supplier of services. Provided that if the location of recipient of services is not available with the supplier, the place of supply shall be the location of the supplier of services. Section 12(13), IGST Act: The place of supply of insurance services shall,— (a) to a registered person, be the location of such person; (b) to a person other than a registered person, be the location of the recipient of services on the records of the supplier of services. Section 12(14), IGST Act: The place of supply of advertisement services to the Central Government, a State Government, a statutory body or a local authority meant for the States or Union territories identified in the contract or agreement shall be taken as being in each of such States or Union territories and the value of such supplies specific to each State or Union territory shall be in proportion to the amount attributable to services provided by way of dissemination in the respective States or Union territories as may be determined in terms of the contract or agreement entered into in this regard or, in the absence of such contract or agreement, on such other basis as may be prescribed.
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