How to Determine the Place of Supply when there is Movement of Goods

In the previous blog, we discussed what is place of supply and why it is important to determine the place of supply. In the next few blogs, we will cover the parameters to determine the place of supply. Here, we will learn how to determine the place of supply of goods – in which movement of the goods is involved.

When a supply involves movement of goods, the place of supply is the location at which the movement of goods terminates for delivery to the recipient.Click To Tweet
Example 1

George Electronics in Mumbai, Maharashtra, supplies 10 computers to Aravind Electronics in Pune, Maharashtra.

Here,
Location of the supplier: Mumbai in Maharashtra
Place of supply: The place of business of Aravind Electronics is in Pune, Maharashtra and the movement of the computers terminates here for delivery. Hence, the place of supply is Pune in Maharashtra.

intrastate supply
This is an intrastate supply. The taxes applicable are CGST and SGST.

Example 2

George Electronics in Mumbai, Maharashtra supplies 20 computers to Manoj Electronics in Ahmedabad, Gujarat.

Location of supplier: Mumbai in Maharashtra
Place of supply: Ahmedabad in Gujarat

interstate supply

This is an inter state supply. The tax applicable on this supply is IGST.

Let us understand the concept of termination of movement of goods when the place of supply is different from the location of the recipient

Example 3

George Electronics in Mumbai, Maharashtra, receives an order for 50 computers from Computer World in Goa. Computer World also informed George Electronics that they will take delivery of the computers ex-factory, at the premises of George Electronics.

Let us determine the charge of tax here.

Location of supplier: Mumbai in Maharashtra
Place of Supply: The place of business of the recipient, Computer World, is in Goa. It must be noted however, that Computer World has agreed to take delivery of the computers ex-factory of the supplier, George Electronics. This implies that the termination of the movement of the computers to Computer World takes place ex-factory of George Electronics, i.e., in Mumbai. Hence, the place of supply is Mumbai in Maharashtra.

intrastate supply scenarios
This is an intra-state supply and the taxes applicable are CGST and SGST.

Next-in-line:
Determining the place of supply when there is no movement of goods

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Pugal T & Anisha K Jose

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