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CMA Final · Indirect Tax Laws and Practice · Place of Supply

Bharat Metals Ltd, Mumbai (registered), sells goods to Zenith Ltd, Bengaluru (registered). On Zenith's direction, Bharat Metals delivers the goods before movement to Hyderabad, to Orion Pvt Ltd, a third person whose principal place of business is Chennai, by transfer of documents of title. Orion then directs the goods onward. What is the place of supply of the goods delivered by Bharat Metals under Section 10?

The place of supply is Chennai. Where goods are delivered to a recipient or another person on the direction of a third person, before or during movement, that third person is deemed to have received them, so the place of supply is the third person's principal place of business.

  1. AHyderabad, where the goods are finally delivered
  2. BBengaluru, the principal place of business of the buyer Zenith Ltd
  3. CMumbai, the location of the supplier
  4. DChennai, the principal place of business of the third personCorrect

Explanation

Under clause (b), where goods are delivered by the supplier to a recipient or another person on the direction of a third person, before or during movement, by transfer of documents of title or otherwise, the third person is deemed to have received the goods. The place of supply is that third person's principal place of business. The third person here is Orion, so Chennai. Hyderabad is the movement end point under clause (a), which clause (b) displaces.

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