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CA Intermediate · Taxation · Place of Supply

Ramesh & Co., a registered person in Pune (Maharashtra), buys goods from Alpha Ltd. of Surat (Gujarat). Ramesh & Co. directs Alpha Ltd. to deliver the goods to Beta Ltd. in Indore (Madhya Pradesh), a third person, 'bill to ship to' model, and Beta Ltd. receives them on Ramesh's instructions. What is the place of supply for the supply by Alpha Ltd. to Ramesh & Co.?

The place of supply is Pune, Maharashtra. When goods are delivered to a third person on the direction of the buyer, the goods are treated as received by the person who gave the direction, so the place of supply is that buyer's principal place of business, not the third person's location.

  1. AIndore, Madhya Pradesh
  2. BSurat, Gujarat
  3. CPune, Maharashtra, the principal place of business of Ramesh & Co.Correct
  4. DPlace of supply cannot be determined

Explanation

Where goods are delivered by the supplier to a third person on the direction of the recipient (whether acting as agent or otherwise), the goods are deemed received by the person giving the direction. So the place of supply is the principal place of business of Ramesh & Co., Pune. Indore is wrong as it is the location of the third person actually receiving the goods. Hence the supply is inter-State (Gujarat to Maharashtra).

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