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CA Intermediate · Taxation · Place of Supply

Sunrise Textiles Ltd, Surat (Gujarat), sells machinery to Kavya Traders, a registered person in Jaipur (Rajasthan). Goods are moved by the supplier on its own vehicle from Surat to Jaipur. Kavya Traders has instructed that the goods be delivered to its Jaipur warehouse. What is the place of supply under the IGST Act, 2017?

The place of supply is Jaipur, Rajasthan, because for goods supplied with movement the place of supply is where the movement terminates for delivery to the recipient. The supplier's location in Surat does not decide it, so the supply is an inter-State supply attracting IGST.

  1. ASurat, Gujarat
  2. BJaipur, RajasthanCorrect
  3. CLocation of the supplier's registered office
  4. DPlace where payment is received

Explanation

Where goods are supplied involving movement, the place of supply is the location where movement of goods terminates for delivery to the recipient. The movement ends in Jaipur, so the place of supply is Rajasthan. Surat is the location of supplier, not the place of supply, so the supply is inter-State.

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