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CA Final · Indirect Tax Laws · Place of Supply

Ramesh Pharma, Indore (Madhya Pradesh), sells medicines to Healthwell Clinic, a registered person in Jaipur (Rajasthan). The goods are stored in Ramesh's own godown at Indore, and Healthwell takes delivery there itself with no movement arranged by the supplier, and then transports the goods to Jaipur by its own vehicle. Which statement on place of supply is correct?

The place of supply is Jaipur, Rajasthan. Clause (a) covers movement of goods by the supplier, the recipient or any other person, and the place of supply is where the movement terminates for delivery to the recipient. Since the recipient carries the goods to Jaipur, that is the place of supply.

  1. AJaipur, because the recipient is located there
  2. BIndore, because the movement of goods by the recipient terminates at Indore
  3. CJaipur, because the recipient's vehicle moves the goods there and movement terminates for delivery to the recipient at JaipurCorrect
  4. DIndore, because clause (a) applies only to movement by supplier

Explanation

Clause (a) applies where the supply involves movement of goods whether by the supplier, the recipient or any other person. Here the recipient moves the goods from Indore to Jaipur, and the movement terminates at Jaipur, so the place of supply is Jaipur. Indore would be correct only if the goods did not move, under clause (c), and clause (a) is not limited to supplier movement.

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