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

Bharat Steel (Kolkata) sells goods to Orion Ltd (Mumbai) on the direction of Delta Pvt Ltd, whose principal place of business is Chennai. The goods are delivered to Orion before movement by transfer of documents of title on Delta's direction, Delta acting as a third person. Under Section 10(1)(b), what is the place of supply of Bharat Steel's supply?

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

  1. AMumbai, the place where Orion receives the goods
  2. BKolkata, the supplier's location
  3. CChennai, the principal place of business of the third personCorrect
  4. DPlace cannot be determined and is left to prescribed rules

Explanation

Under clause (b), where goods are delivered by the supplier to a recipient or other 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, Chennai. Mumbai is wrong because the deeming rule overrides the physical delivery.

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