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CS Executive · Tax Laws and Practice · Time, Value and Place of Supply

Sharma Traders of Jaipur (Rajasthan) sells machinery to Kaveri Industries of Chennai (Tamil Nadu). On the buyer's instruction, the goods are dispatched directly to Kaveri's customer at Kochi (Kerala). Kaveri Industries gets the goods delivered on its behalf. What is the place of supply in the supply by Sharma Traders?

The place of supply is Chennai, Tamil Nadu. When goods are delivered to another person on the direction of a third person who is the buyer, the buyer is deemed to have received them, so the place of supply is the buyer's principal place of business rather than the actual delivery point.

  1. AKochi, Kerala, as the place of actual delivery
  2. BJaipur, Rajasthan, as the place of dispatch
  3. CChennai, Tamil Nadu, as the principal place of business of the buyerCorrect
  4. DAny of the three, at the option of Sharma Traders

Explanation

Where goods are delivered by the supplier to a recipient or any other person on the direction of a third person, it is deemed that the third person (the buyer who directed) has received the goods. So the place of supply is the principal place of business of Kaveri Industries, Chennai. Kochi is wrong because the actual consignee is ignored for this purpose.

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