in Gujarat has awarded a contract to Y in Karnataka for supply of Plant and
machinery and their installation. Y in turn placed order on Z in Mumbai for
supply of plant and machinery to X. Z supplies plant and machinery directly to X
in Gujarat and issued invoice to Y in Karnataka. The plant and machinery is
finally installed by Y as per the requirement and raises the bill on X including the value of
plant and machinery. Determine
as to how the transaction would be taxed under GST.
to section 10(b) of IGST Act, where the 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, either 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
Thus, the supplier of goods i.e. Z is located in Mumbai and place of supply according to above provision will be Karnataka.
second transaction, further supply of goods and their installation invoice would
be raised by Y to X and tax of integrated tax would be chraged on
value of plant and machinery including installation charges.