Section 13(2): The Default Cross-Border Rule

Section 13 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.

The rule that decides whether a cross-border service is taxed in India — and, in most cases, whether an Indian supplier's service is an export.

Section 13(1): the section applies where the location of the supplier or the location of the recipient is outside India. Section 13(2): the place of supply of services except the services specified in sub-sections (3) to (13) shall be the location of the recipient of services; proviso — where the location of the recipient is not available in the ordinary course of business, the place of supply shall be the location of the supplier of services.

Where it sits

Section 12 applies where both parties are in India. Section 13 applies where either is outside.

And "either" is doing real work. Section 13 governs both directions:

• an Indian supplier serving a foreign recipient — potentially an export of services;
• a foreign supplier serving an Indian recipient — potentially an import of services, taxable under reverse charge.

The order of analysis is the same as under s.12:

1. Is one of the parties outside India? If not, s.12 applies.
2. Does the service fall within any of sub-sections (3) to (13)? If so, that governs.
3. Only if not — s.13(2): the recipient's location.

The eleven specific sub-sections

Two are gone. Section 13(8)(b) — "intermediary services" was omitted by the Finance Act, 2026, w.e.f. 30.03.2026. And s.13(9), on transportation of goods other than by mail or courier, was omitted by the Finance Act, 2023, notified through Notification No. 28/2023-CT, w.e.f. 01.10.2023. Both omissions push those services to s.13(2) — the recipient's location. Intermediary services omitted →

Why the default matters so much

For an Indian supplier serving a foreign customer, s.13(2) puts the place of supply outside India — which is the first step towards the supply being an export of services.

But it is only the first step. Section 2(6) of the IGST Act requires five conditions for an export of services, and place of supply outside India is only one of them:

• the supplier is located in India;
• the recipient is located outside India;
• the place of supply is outside India;
• payment has been received in convertible foreign exchange or in Indian rupees wherever permitted by the RBI; and
• the supplier and recipient are not merely establishments of a distinct person in accordance with Explanation 1 to s.8.

So a service falling under s.13(2) with a foreign recipient is not automatically an export. The other four conditions have to be met, and the fifth in particular defeats many intra-group arrangements. Export of services →

For a foreign supplier serving an Indian customer, s.13(2) puts the place of supply in India, making it an import of services under s.2(11) — taxable under reverse charge, with the recipient issuing a self-invoice under s.31(3)(f) and the time of supply determined by the sixty-day rule in s.13(3) of the CGST Act. The sixty-day rule →

The proviso: where the recipient's location is unavailable

"Provided that where the location of the recipient of services is not available in the ordinary course of business, the place of supply shall be the location of the supplier of services."

The condition is narrow. Not "where the supplier chose not to record it" — "not available in the ordinary course of business".

So the proviso does not excuse an absent customer master. A supplier that in the ordinary course records who its customers are and where they are cannot invoke it merely by not having done so.

Where it genuinely operates: anonymous or aggregated supplies where the recipient's location is not obtainable through the ordinary commercial process.

And note the asymmetry with s.12(2)(b)(ii), which defaults to the supplier's location where "the address on record" does not exist — a records test. Section 13(2)'s proviso is an availability in the ordinary course test, which is stricter.

The practical control is the same either way: capture and hold the recipient's location. For an Indian supplier it decides whether the supply is an export; for an inbound service it decides whether reverse charge applies.

The two limbs to establish, every time

"Location of the supplier of services" — s.2(15) of the IGST Act: the place of business for which the registration has been obtained, where the supply is made from it; the fixed establishment elsewhere where made from that; the establishment most directly concerned where made from more than one; and otherwise the usual place of residence.

"Location of the recipient of services" — s.2(14): the same architecture applied to receipt.

"Fixed establishment" — s.2(7) of the IGST Act: a place other than the registered place of business characterised by a sufficient degree of permanence and a suitable structure in terms of human and technical resources to supply or receive and use services for its own needs.

Why they matter in a cross-border context: a foreign company with a project office, branch or liaison office in India may have a fixed establishment here — which changes its location and may take the supply out of s.13 altogether into s.12. And it engages Explanation 1 to s.8, under which an establishment in India and an establishment outside India are treated as establishments of distinct persons — which is the fifth condition that defeats an export. Establishments of distinct persons →

Key takeaways

• Section 13 applies where either party is outside India; s.13(2) is its default.
• Check sub-sections (3) to (13) first — eleven specific rules take priority.
• Section 13(8)(b) intermediary was omitted w.e.f. 30.03.2026, and s.13(9) goods transport w.e.f. 01.10.2023 — both now fall to s.13(2).
• Place of supply outside India is only one of five conditions for an export of services under s.2(6).
• The proviso applies only where the recipient's location is not available in the ordinary course of business — a strict test.
• A foreign company's fixed establishment in India can change the analysis entirely.

Read next

• Section 13(3): Goods Made Available and Physical Presence
• Export of Services: The Five Conditions in Section 2(6)
• Intermediary Services: Place of Supply After the 2026 Omission
• Establishments of Distinct Persons and the Export Bar

Disclaimer: Positions stated as on 5 September 2026, based on the IGST Act as amended to 31 March 2026 (ICAI Bare Law, 12th edition).