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

Mehta Traders of Surat sells machinery to Kavya Enterprises of Jaipur, a registered person. The goods are moved by a transporter from Surat and the movement ends at Kavya's godown in Jaipur. Under the IGST Act, 2017, what is the place of supply?

The place of supply is Jaipur. For goods that involve movement, the place of supply is where the goods are located when the movement ends for delivery to the recipient. The origin at Surat, invoice location or payment location does not determine it.

  1. ASurat, where the movement of goods begins
  2. BJaipur, the location of the goods when movement terminates for delivery to the recipientCorrect
  3. CThe place where the invoice is raised
  4. DThe place where payment is received by the supplier

Explanation

Where a supply involves movement of goods, whether by the supplier, the recipient or any other person, the place of supply is the location of the goods at the time the movement terminates for delivery to the recipient. Movement ends in Jaipur, so Jaipur is the place of supply. Surat is the origin, which is irrelevant.

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