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CA Final · Indirect Tax Laws · Place of Supply

Bharat Steels, Kolkata, sells goods to Mehta Exports, Mumbai (registered). On Mehta's direction, Bharat Steels delivers the goods to a buyer, Zenith Ltd, at Surat while the goods are in movement, and Mehta transfers the documents of title. Mehta's principal place of business is Mumbai. Under Section 10(1)(b), what is the place of supply of Bharat Steels' supply to Mehta?

The place of supply is Mumbai. When the supplier delivers goods to another person on the direction of a third person, before or during movement, the third person is deemed to have received the goods, so the place of supply is that third person's principal place of business.

  1. ASurat, where the goods are finally delivered
  2. BKolkata, the supplier's location
  3. CMumbai, the principal place of business of Mehta, the third personCorrect
  4. DPlace cannot be determined and is as prescribed

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, Mumbai. Surat is the delivery point but is not the place under this clause.

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