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CA Intermediate · Taxation · Place of Supply

Vikram Textiles, a registered supplier in Surat (Gujarat), sells 500 metres of fabric to Rahul Traders, a registered person in Jaipur (Rajasthan). The goods are moved by a transporter from Surat to Jaipur on the buyer's instructions. What is the place of supply?

The place of supply is Jaipur, Rajasthan. When a supply of goods involves movement, the place of supply is where the movement terminates for delivery to the recipient. The goods end their journey in Jaipur, so Surat as the origin is irrelevant and the supply is inter-State.

  1. ASurat, Gujarat
  2. BJaipur, RajasthanCorrect
  3. CPlace where the invoice is raised
  4. DPlace where the transporter is registered

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. Here, movement terminates at Jaipur. Surat is only the origin and does not decide the place of supply, so the supply is an inter-State supply.

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