Place of supply in case of No Movement of Good

Place of supply in case of No Movement of Good

Section 10(1)(c) states that where the supply does not involve movement of goods, whether, by the supplier or the recipient, the place of supply shall be the location of such goods at the time of the delivery to the recipient; 

When goods are of such nature which does not require any movement, place of supply shall be the location of such goods

Example

JMS Pvt Ltd registered in Delhi sold its pre-installed transmission tower(electric tower) located at Goa to SPR Pvt. Ltd.  registered in Rajsthan. 

In this case, the location of the supplier is Delhi, but a place of supply will be Goa. Hence, IGST will be levied. 

Example

JMS Pvt. Ltd. of Delhi gets an order of 50 Dell Laptops from SPR Pvt. Ltd in Tamil Nadu. SPR Pvt. Ltd informs JMS Pvt. Ltd. that they will take the delivery of the Dell Laptops from the factory of JMS Pvt. Ltd. at Laxmi Nagar. 

Over here the location of the supplier is Delhi and location of the receiver are Tamil Nadu. However, SPR Pvt. Ltd has agreed to take the delivery from JMS Pvt. Ltd.'s Jaipur factory. This implies that the termination of the movement of the Dell Laptops to SPR Pvt. Ltd takes place at the factory of JMS Pvt. Ltd., i.e., in Laxmi Nagar. Hence, the place of supply is Laxmi Nagar in Delhi.

This is an intra-state transaction and CGST, and SGST will be levied by JMS Pvt. Ltd.. It should be noted that JMS Pvt. Ltd. will be charging SGST and CGST in Delhi, the credit of which will not be available to SPR Pvt. Ltdin Tamil Nadu. Hence, there will be a loss of credit. 

Alternatively, if SPR Pvt. Ltd would have asked JMS Pvt. Ltd. to deliver goods at its factory in Tamil Nadu it would have become an inter-state transaction and IGST would have been levied. The credit of IGST would have been available to SPR Pvt. Ltd.

Many experts have an alternate view on this topic it says as the transaction involves the movement of goods by the buyer it should be covered under Section 10(1)(a) and not 10(1)(c). Which implies that place of supply should be Tamil Nadu and IGST shall be levied on the transaction.