Skip to content

CA Final · Indirect Tax Laws · Place of Supply

Gujarat Power Systems, Ahmedabad (Gujarat), supplies a turbine to Orissa Steel Ltd., registered in Odisha. The turbine is dispatched in parts and assembled and installed at Orissa Steel's plant in Rourkela, Odisha. The invoice shows Orissa Steel's registered office at Bhubaneswar, Odisha. Separately, Gujarat Power sells a spare part to Mr. Anil, an unregistered person, and delivers it at Surat, Gujarat, but the invoice records Anil's address as Pune, Maharashtra. Which statement is correct?

The turbine's place of supply is Odisha, the installation site, and the spare part's is Maharashtra. Installation or assembly at site fixes the place of supply for the turbine, while supply to an unregistered person is governed by the address recorded in the invoice, overriding the delivery location.

  1. ATurbine: Gujarat; spare part: Maharashtra
  2. BTurbine: Odisha (Rourkela site); spare part: MaharashtraCorrect
  3. CTurbine: Odisha (Rourkela site); spare part: Gujarat
  4. DTurbine: Gujarat; spare part: Gujarat

Explanation

The turbine is supplied to a registered person and is assembled or installed at site, so under clause (d) the place of supply is the place of installation, Odisha. The spare part goes to an unregistered person, so clause (ca) applies and the recorded invoice address, Pune in Maharashtra, governs even though delivery is in Surat. Gujarat is wrong for the spare part because clause (ca) overrides the delivery location.

Did you get it right without looking?

One question tells you little. A timed set on Place of Supply shows your real accuracy, how long you take and where you lose marks.

Practise Place of SupplyFree diagnostic mock

More Place of Supply questions