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CA Intermediate · Taxation · Place of Supply

Sundaram Textiles, a registered supplier in Tiruppur (Tamil Nadu), sells 500 shirts to Mr. Karthik, an unregistered individual in Kochi (Kerala). The goods are handed over to a transporter in Tiruppur, who delivers them to Karthik in Kochi on Karthik's instructions. What is the place of supply?

The place of supply is Kochi, Kerala. For a supply of goods that involves movement, the place of supply is where the movement terminates for delivery to the recipient. Tiruppur is merely the starting point, so the supply is inter-State and attracts IGST.

  1. ATiruppur, Tamil Nadu, where the goods were handed to the transporter
  2. BKochi, Kerala, where the goods are delivered to the recipientCorrect
  3. CPlace of registered office of the supplier
  4. DPlace where the invoice is raised

Explanation

Where goods are supplied involving movement, the place of supply is the location where the movement of goods terminates for delivery to the recipient. The goods end up in Kochi, so the place of supply is Kerala. Tiruppur is only the origin of movement and is therefore wrong. This is an inter-State supply.

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