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CA Final · Indirect Tax Laws · Place of Supply

Bharat Cement Ltd., Nagpur (Maharashtra), sells goods to Dhruv Agencies, Hyderabad (Telangana), registered in Telangana. On Dhruv's direction, the goods are delivered by Bharat Cement directly to Sai Builders, Bengaluru (Karnataka), during movement, with transfer of documents of title. Dhruv's principal place of business is Hyderabad. What is the place of supply for the supply by Bharat Cement to Dhruv?

The place of supply is Hyderabad, Telangana. When goods are delivered to another person on the direction of a third person, the third person is deemed to have received them, so the place of supply is that third person's principal place of business, not the delivery location.

  1. ABengaluru, Karnataka, where goods are finally delivered
  2. BHyderabad, Telangana, being the principal place of business of the third personCorrect
  3. CNagpur, Maharashtra, being the location of the supplier
  4. DKarnataka, because movement terminates there

Explanation

Where goods are delivered by the supplier to another person on the direction of a third person, before or during movement, the third person is deemed to have received the goods. The place of supply is that third person's principal place of business, Hyderabad. Bengaluru is wrong because clause (a) is displaced by the bill-to-ship-to rule in clause (b).

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