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CA Final · Indirect Tax Laws · Place of Supply

Bharat Cement Ltd, Nagpur (Maharashtra), sells cement to Delta Builders (registered, Pune). On Delta's instruction, Bharat delivers the cement directly to Ekta Constructions, a customer of Delta, at a site in Goa during movement from Nagpur. Delta's principal place of business is Pune; Ekta's is in Panaji. Under Section 10, what is the place of supply for the supply by Bharat Cement to Delta Builders?

The place of supply is Pune. When the supplier delivers goods to another person on the direction of a third person, the third person is deemed to have received them, and the place of supply is that third person's principal place of business. Delta Builders gave the direction, so Pune applies.

  1. AGoa, being the location where movement terminates
  2. BMaharashtra (Nagpur), being the supplier's location
  3. CPune, being the principal place of business of Delta Builders, the third person who directed deliveryCorrect
  4. DPanaji, being the principal place of business of Ekta Constructions

Explanation

Under Section 10(1)(b), where goods are delivered by the supplier to another person on the direction of a third person, the third person is deemed to have received the goods and the place of supply is the third person's principal place of business. Delta directed delivery, so the place is Pune. Goa applies only to the onward leg, not to this supply, so it is wrong.

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