Tutorial · GST · Understand GST

05 · Place of supply, rates, and HSN/SAC

Why Kerala vs Karnataka changes the tax line, what 18% is attached to, and why a B2B line without HSN is a filing defect. About 8 min. As of August 2026.

This tutorial explains GST the way a new founder or accounts clerk needs it, and how the same work is done in Phyntara. It is teaching, not a legal opinion. Thresholds, due dates, and late fees change when the GST Council notifies them. Your CA files. Confirm the live rule on gst.gov.in before you act on a rupee.

Place of supply (POS)

POS is the state that is treated as the place of the supply. It decides CGST+SGST vs IGST. For most B2B services it is the recipient’s location (their GSTIN state). For goods it is typically where the goods are delivered. There are special rules for property, events, telecom, and a long list of exceptions. If you are not sure, stop and ask the CA before issuing — do not “fix it in 3B.”

Example · Same work, two tax lines

Your company GSTIN starts with 32 (Kerala). A Bengaluru company (29) buys your software service. POS is 29. The bill shows IGST. A Kochi company (32) buys the same service. The bill shows CGST + SGST. Phyntara sets this from the customer’s state, not from a clerk’s memory.

Rates

GST rates are notified. Common slabs people see: 0% (nil-rated), 5%, 12%, 18%, 28%, plus compensation cess on a few items. Most professional and SaaS services sit at 18%. Food, textiles, and medicines are where people get rates wrong. Rate is tied to HSN/SAC, not to “what we feel we are.”

HSN and SAC

HSN = Harmonised System of Nomenclature (goods).
SAC = Services Accounting Code (services). Many service codes start with 99.
B2B tax invoices: Phyntara requires HSN/SAC on every taxable line. The portal and GSTR-1 JSON will not forgive a blank.
Digit length (4 / 6 / 8) depends on turnover slabs notified from time to time. When in doubt, use the code your CA mapped for that SKU.