PLACE OF SUPPLY_GOODS

1. Unit 3: Time, Place and Value of Supply
Time of Supply – in case of Goods and in case of Services –
Problems on ascertaining Time of Supply;
Place of Supply – in case of Goods and in case of Services (both General and Specific
Services) – Problems on Identification of Place of Supply;
Value of Supply – Meaning, Inclusions and Exclusions.
Problems on calculation of ‘Value of Supply’.

2. NEED FOR DETERMINATION OF PLACE OF SUPPLY
GST is destination based tax i.e., consumption tax, which means tax will be levied where goods and services are consumed
and will accrue to that state. So, the state where they are consumed will have the right to collect GST.
The reasons why an accurate determination of place of Supply is important for business are listed below :
 Wrong classification of supply between interstate or intra-state and vice-versa may lead to hardship to the taxpayer as
per section 19 of IGST Act and section 70 of CGST Act.
 Where wrong taxes have been paid on the basis of the wrong classification, refund will have to be claimed by the
taxpayer
 The taxpayer will have to pay the correct tax along with interest for delay on the basis of revised/ correct classification
 Also, correct determination of place of supply will help us in knowing the incidence of tax. As if place of supply is
determined as a place outside India, then tax will not have to be paid on that transaction

3. Place of Supply in GST: While determining the levy of taxes based on Place of Supply, two things are considered namely:
1. Location of Supplier: It is the registered place of business of the supplier.
2. Place of Supply: It is the registered place of business of the recipient
Example : 1
X Ltd., is a supplier of craft products, having the registered office in Chennai, Tamil Nadu. It supplies goods to schools in
Madurai, Tamil Nadu. Here since the supplier as well as the recipient is located in the same State i.e Tamil Nadu, it will be
counted as ‘Intra-State Supply of Goods’ and hence SGST & CGST will be levied.
Example : 2
X Ltd., located in Mumbai, Maharashtra receives order from M/s Y Ltd. located in Ahmedabad, Gujarat for supply of one
machine. Find the place of supply and applicable GST?
Answer:
1. Location of Supplier: Mumbai (Maharashtra).
2. Place of Supply: Ahmedabad (Gujarat)
Since, the movement of goods terminate at Ahmedabad.
Applicable GST = IGST

4. PLACE OF SUPPLY IN CASE OF GOODS
Place of supply of Goods:
Place of supply of goods under GST defines whether the transaction will be counted as intra-state or inter-state,
and accordingly levy of SGST, CGST & IGST will be determined. Following topics under it are as follows:
1. Movement of Goods
2. No movement of Goods
3. Goods are assembled or installed at Site
4. Goods supplied on a vessel/ conveyance
5. Place of Supply of goods cannot be determined
6. Imports and exports

6. 1. Supply involves movement of goods
Nature of supply Place of supply of goods
Supply involves movement of goods whether by
supplier or recipient or by any other person.
Location of the goods at the time at which the
movement of goods terminates for delivery to the
recipient.
Mr. C of Chennai received purchase order from Mr. H of Hyderabad for want of commercial goods. Now supply
involves movement of goods by supplier from Chennai to Hyderabad in a truck by road.
Place of supply of goods = Hyderabad.
IGST will be levied.

7. 2. The supplier delivers goods to a recipient or any other person on the direction of a
third person by way of transfer of documents of title to the goods or otherwise
Nature of supply Place of supply of goods
Goods are delivered by the supplier to a
recipient or any other person on the
direction of a third person,
whether acting as an agent or otherwise,
before or during movement of goods by
way of transfer of documents of title to the
goods or otherwise.
It shall be deemed that the said third person
has received the goods and the Place of
Supply of such goods shall be the principal
place of business of such person.

8. Mr. C of Chennai received purchase order from Mr. H of Hyderabad for want of commercial goods.
Now supply involves movement of goods by supplier from Chennai to Hyderabad by road in a truck.
Upon the direction of Mr. H of Hyderabad these goods are redirect to Branch office of Mr. H located in
Vijayawada, (in Andhra Pradesh) by way of transfer of documents of title to the goods (i.e. Lorry
Receipt or LR copy).
Place of supply goods = Hyderabad.
IGST will be levied.
It shall be deemed that the said third person
has received the goods and the Place of Supply
of such goods shall be the principal place of
business of such person.

9. Mr. M direct (Agent in Madurai) to Mr. C (Supplier in Chennai) to deliver the goods
to Mr. H of Hyderabad, Find out Place of supply by citing relevant provisions as
CGST Act.
Place of supply goods = Madurai.
CGST & SGST will be levied
It shall be deemed that the said third person has received the goods and the Place of Supply of such goods shall be the
principal place of business of such person, even if Mr. M acts as agent of Mr. H (namely Principal)

10. 3. Supply does not involve movement of goods
Nature of supply Place of supply of goods
Where the supply does not involve
movement of goods, whether by the
supplier or the recipient.
Location of such goods at the time of the
delivery to the recipient
(This place of supply is irrespective of the
location of the buyer and seller)
A and B both located in Kerala. B comes to shop of A. A delivered goods to B. What is the place of supply of
goods. Which levy will attract?
Answer:
Place of supply goods = Kerala.
CGST & SGST will be levied
Location of such goods at the time of the delivery to the recipient.
This is irrespective of the location of the buyer and seller.

11. M/s Karina Ltd. incorporated in Mumbai and own a godown in Chennai. Mr. M of Mumbai approached M/s
Karina Ltd. of Mumbai for purchase of goods lying in godown at Chennai. Mr M further informs that he does
not want delivery of goods in Mumbai. M/s Karina Ltd. issues invoice for sale of goods in Mumbai.
Find the place of supply of goods and levy of tax?
Place of supply goods = Chennai
IGST will be levied
Location of such goods at the time of the delivery to the recipient where supply does not involve movement of goods.
This place of supply is irrespective of the location of the buyer and seller.

12. M/s X Ltd. has place of business in Chennai, being an NBFC given an asset under financial lease to M/s ABC Ltd. of
Chennai. The said asset so far used by M/s ABC Ltd. in their factory located at Hyderabad. At the end of lease period the
said asset acquired by M/s ABC Ltd. at a nominal amount. Find the place of supply of goods and levy of GST.
Answer:
Place of supply of goods = Hyderabad.
IGST will be levied.
Since, there is no movement of goods from one place to another, provisions of Sec. 10(1)(c) of IGST Act will be
applicable.

13. 4. Goods are assembled or installed at Site
Nature of supply Place of supply of goods
Where the goods are assembled or installed
at site.
Place of such installation or assembly
Mr. D located in New Delhi, place order on Mr. Y of New Delhi for installation of Air-condition machine in his factory
located in Chennai. Mr. D procures the Indoor and out-door units, set of plugs, electrical cables, distribution boards and
other items from different States in India and arranges for delivery in Chennai. The said machine assembled by Mr. Y in
Chennai. Find the Place of supply of goods and levy tax?
Answer:
Place of supply of goods = Chennai
Mr. Y is liable to pay IGST.

14. 5. Goods supplied on a vessel/conveyance
Nature of supply Place of supply of goods
Where the goods are supplied on board a
conveyance including a vessel, an aircraft, a
train or a motor vehicle.
Location at which such goods are taken on
board
Chennai express train going from Chennai to Cochin, M/s X Ltd. located in Cochin
has supplied the food which are given to passengers during night time. The food
packets are loaded at Chennai Central Station, Chennai.
Find the place of supply of goods and levy of GST.
Answer:
Place of supply of goods = Chennai
M/s X Ltd. is liable to pay IGST.

15. Mr. C of Chennai supplied goods to M/s Spice Jet Airlines of Chennai flying between
Delhi-Mumbai. The goods are loaded in the aircraft in Delhi. Find the place of supply of
goods and levy of tax.
Answer:
Place of supply of goods = Delhi
Mr. C of Chennai is liable to pay IGST.

16. 6. Place of Supply of goods cannot be determined
Nature of supply Place of supply of goods
Any thing not covered under sub-section (a)
to (e) of Section 10(1) of the IGST Act,
2017
Determined in such manner as may be
prescribed (i.e. as recommended by GST
Council)