Place of Supply of Services Related to Immovable Property [Section 12(3)]
## Place of Supply – Services Related to Immovable Property [Section 12(3) of IGST Act]
When both the supplier and recipient are in India, certain services connected with immovable property follow a special rule – the place of supply is determined by where the immovable property is located, not by the location of the recipient.
### Covered Services
(a) Services by professionals & immovable-property linked services:
Services for carrying out or coordinating construction work
(b) Lodging accommodation services:
Hotel, inn, guest house, home stay, club, campsite
Houseboat or any other vessel
(c) Accommodation for organising functions:
Marriage, reception, official, social, cultural, religious, business functions
Includes services ancillary to such use
(d) Any services ancillary to (a), (b) or (c)
### Rule for Place of Supply
Situation
Place of Supply
Immovable property located in India
Location of the property
Immovable property located outside India
Location of the recipient
Property located in more than one State/UT
Each State/UT in proportion to value (per contract/reasonable basis)
### Key Point
For immovable property situated outside India, the rule shifts to the recipient's location – this is an exception to the general 'property location' rule.
Worked example
### Example 1
Example 1: Mr. A (Delhi) hires an architect from Mumbai to design a hotel in Goa.
Service: Architect (covered under 12(3))
Property location: Goa
Place of Supply = Goa (irrespective of location of architect or recipient)
### Example 2
Example 2: A registered person in Bengaluru stays at a hotel in Jaipur for 3 nights.
Service: Lodging accommodation
Property location: Jaipur
Place of Supply = Rajasthan (Jaipur)
### Example 3
Example 3: An Indian company books interior decoration services for its villa located in Dubai (UAE).
Property is outside India → use location of recipient
Place of Supply = Location of recipient in India
⚠️ Common exam mistakes
Applying location of recipient when the immovable property is in India – wrong; always property location for immovable property in India.
Forgetting that hotel/lodging accommodation falls under 12(3), not 12(4) performance-based services.
Missing the special rule that swaps to recipient's location when the property is outside India.
Treating houseboat/vessel lodging differently – it is also covered under 12(3) immovable property rule.
Bare-Act text Section 12(3) · IGST Act, 2017 · click to expand
Section 12(3) of IGST Act, 2017 – The place of supply of services, directly in relation to an immovable property, including services provided by architects, interior decorators, surveyors, engineers and other related experts or estate agents, any service provided by way of grant of rights to use immovable property or for carrying out or co-ordination of construction work, or by way of lodging accommodation by a hotel, inn, guest house, home stay, club or campsite, by whatever name called, and including a house boat or any other vessel, or by way of accommodation in any immovable property for organising any marriage or reception or matters related thereto, official, social, cultural, religious or business function, or services ancillary thereto, shall be the location at which the immovable property or boat or vessel is located or intended to be located. Provided that if the location of the immovable property or boat or vessel is located or intended to be located outside India, the place of supply shall be the location of the recipient.