# Supplies in Territorial Waters

## The Problem

India's landmass is divided into States and Union Territories, but the country's territorial waters (sea up to 12 nautical miles from baseline) are not part of any State/UT. So if a supplier's location, or the place of supply, is in territorial waters, which State's GST applies?

## The Rule — Section 9, IGST Act

> Where the location of the supplier is in territorial waters → deemed to be in the coastal State/UT nearest to the baseline.

> Where the place of supply is in territorial waters → deemed to be in the coastal State/UT nearest to the baseline.

Both ends are treated symmetrically. The closest coastal State/UT "absorbs" the location for GST purposes.

## Practical Implication

This rule prevents jurisdictional vacuum and ensures supplies in/around India's territorial waters (e.g., offshore drilling services, marine activities) get attributed to a State/UT for CGST/SGST or IGST classification.

Worked example

### Example 1

Example — Offshore service supplied in territorial waters off Mumbai coast

If services are supplied at a rig in territorial waters nearest to the Maharashtra coastline, the location of supplier (and/or PoS) is deemed to be Maharashtra. Accordingly, intra-State or inter-State classification flows from there.

⚠️ Common exam mistakes

Treating territorial waters as a separate jurisdiction with no GST applicability.
Allocating to the supplier's registered State instead of the nearest coastal State/UT.
Forgetting that BOTH location of supplier and place of supply can be deemed — the rule applies in both directions.

Bare-Act text Section 9 · IGST Act, 2017 · click to expand

Section 9, IGST Act: Notwithstanding anything contained in this Act,— (a) where the location of the supplier is in the territorial waters, the location of such supplier; or (b) where the place of supply is in the territorial waters, the place of supply, shall, for the purposes of this Act, be deemed to be in the coastal State or Union territory where the nearest point of the appropriate baseline is located.

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Supplies in Territorial Waters [Section 9 IGST Act]

Worked example

⚠️ Common exam mistakes