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CA Final · Indirect Tax Laws · Place of Supply

Sundaram Traders, a registered dealer in Chennai (Tamil Nadu), sells machinery to Kavita Rao, an unregistered individual. Goods are transported by Sundaram's own vehicle and delivered at Kavita's factory in Pune (Maharashtra). The invoice records Kavita's address as a Bengaluru (Karnataka) residence, and she takes delivery at Pune. What is the place of supply?

The place of supply is Karnataka. Because the buyer is unregistered, the place of supply is the address recorded in the invoice, which overrides the delivery location rule. The invoice shows a Bengaluru address, so Karnataka is the place of supply, not Maharashtra where the goods were delivered.

  1. ATamil Nadu, the location of the supplier
  2. BMaharashtra, where the movement of goods terminates
  3. CKarnataka, the address of the recipient recorded in the invoiceCorrect
  4. DKarnataka or Maharashtra, at the option of the recipient

Explanation

For a supply to a person other than a registered person, clause (ca) of section 10(1) applies notwithstanding clauses (a) and (c). The place of supply is the location per the address of the recipient recorded in the invoice. Here that is Bengaluru, Karnataka. Maharashtra would be correct only for a registered recipient under clause (a).

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