Skip to content

CA Intermediate · Taxation · Place of Supply

Anita Constructions, a registered person in Pune (Maharashtra), supplies goods to Mehta Enterprises, Nagpur (Maharashtra). Mehta Enterprises directs Anita to hand over the goods to a third person, Kumar Hardware, Bhopal (Madhya Pradesh), who receives them on Mehta's behalf, and the goods are billed to Mehta. What is the place of supply?

The place of supply is Nagpur, Maharashtra. When the supplier delivers goods to another person on the direction of a third person, the third person is deemed to have received the goods. So the place of supply is that third person's principal place of business, not the actual delivery point in Bhopal.

  1. ABhopal, Madhya Pradesh, being the place of delivery
  2. BPune, Maharashtra, being the location of the supplier
  3. CNagpur, Maharashtra, being the principal place of business of Mehta EnterprisesCorrect
  4. DPlace decided by the supplier's choice

Explanation

Where goods are delivered by the supplier to a recipient or any other person on the direction of a third person, whether acting as agent or otherwise, before or during movement, it is deemed that the third person (Mehta) received the goods. The place of supply is therefore the principal place of business of the third person, i.e. Nagpur. Taking Bhopal as the destination ignores this deeming rule.

Did you get it right without looking?

One question tells you little. A timed set on Place of Supply shows your real accuracy, how long you take and where you lose marks.

Practise Place of SupplyFree diagnostic mock

More Place of Supply questions