The basic principle of GST is that it should effectively tax consumption of supplies at the destination or at the point of consumption of goods or services. Place of supply under GST regime is the place; i.e., the taxable jurisdiction where the tax should reach. Place of supply determines whether a transaction qualifies as inter-state or intra-state, which in turn will determine whether SGST plus CGST or IGST would be applicable for the transaction.
It would be deemed that the third person has received the goods and the place of supply of such goods shall be the principal place of business of such a person. (Section 5(2A) of IGST Act)
The terms used in the IGST Act are registered taxpayers and non-registered taxpayers. The presumption in case of supplies to registered person is the location of such a person. Since the recipient of services is a registered entity; hence, address of the recipient is always considered as the place of supply.
With respect to an unregistered recipient, the usual place of supply is the location of the recipient. However, in many cases, the address of the recipient is not available. Therefore, in such cases, location of the supplier of services is considered as the place of supply.