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CA Intermediate · Taxation · Place of Supply

Bharat Mobiles, a registered dealer in Chennai (Tamil Nadu), sells a consignment of phones to Lakshmi Retail, Madurai (Tamil Nadu). At Lakshmi's request, the goods are not delivered to Madurai but are, on the buyer's direction, handed over to a transporter who will deliver them to a third person, Naveen Stores, in Kolkata (West Bengal). Lakshmi Retail is the buyer and Naveen Stores receives the goods on its direction. What is the place of supply under the IGST Act, 2017?

The place of supply is Madurai, Tamil Nadu. When goods are delivered to another person on the direction of a third person, the third person who directed the delivery is deemed to have received the goods, and that person's principal place of business is the place of supply, not the delivery location in Kolkata.

  1. AKolkata, West Bengal, where the goods are delivered
  2. BMadurai, Tamil Nadu, the principal place of business of the person who directed the deliveryCorrect
  3. CChennai, Tamil Nadu, the location of the supplier
  4. DPlace of the transporter's registered office

Explanation

Where goods are delivered by the supplier to a recipient or any other person on the direction of a third person, it is deemed that the third person (who gave the direction) received the goods. The principal place of business of that third person is the place of supply. Lakshmi Retail directed the delivery, so the place is Madurai, Tamil Nadu. Kolkata is the delivery point but is not the place of supply.

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