Place of Supply Under GST
Place of Supply of Goods with analysis of Clause (a) (b) and (c) of sec 10 of IGST with treatment of Ex-factory supply.
Sec 10. (1) The place of supply of goods, other than supply of goods imported into, or exported from India, shall be as under,
(a) Where the supply involves movement of goods, whether by the supplier or the recipient or by any other person, the place of supply of such goods shall be the location of the goods at the time at which the movement of goods terminates for delivery to the recipient;
(b) 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 of such person;
(c) 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;
First we discuss the Clause (b);

1. Goods has been delivered by supplier to a recipient or any other person;
2. On the direction of third person, whether acting as an agent or otherwise
3. Before or during movement of goods, either by way of transfer of documents of title to the goods or otherwise;
4. It shall be deemed that the said third person has received the goods and
5. The place of supply of such goods shall be the principal place of business ofsuch person.

This clause will be applicable only when there is three person;

• Supplier
• Recipient or any other person
• Third person (agent or otherwise)

Supplier in relation to any goods or services or both, shall mean the person supplying the said goods or services or both and shall include an agent acting as such on behalf of such supplier in relation to the goods or services or both supplied;Sec 2(105) of CGST Act.
Recipient of supply of goods or services or both, means-
(a) Where a consideration is payable for the supply of goods or services or both, the person who is liable to pay that consideration;
(b) Where no consideration is payable for the supply of goods, the person to whom the goods are delivered or made available, or to whom possession or use of the goods is given or made available; and
(c) .
and any reference to a person to whom a supply is made shall be construed as a reference to the recipient of the supply and shall include an agent acting as such on behalf of the recipient in relation to the goods or services or both supplied.Sec 2(93) of CGST Act.
Analysis and implications of clause (b)
Clause (b) of sec 10 applicable in case of bill to ship to model. In GST for Inter- state sale movement of goods outside the state is not necessary. Even if goods are within state, supply may be inter- state supply. Sec 10 (b) has deeming provision that goods has goes to other state and then come back suppliers states.
Example-1-Movement of goods is within state.
Mr. A is a supplier in U.P. Mr. B, who is registered in Delhi approached Mr. A and asked him that he wants to buy goods but goods are to be delivered to Mr. C, who is in U.P.
Bill to- Mr. B
Ship to Mr. C
Implication of wordsIt shall be deemed that the said third person has received the goods
In the above example bill has been made to Mr.B but he has not received Goods. As per sec 16 of CGST for taking of credit receipt of goods is necessary condition along with having possession of invoice therefore it shall be deemed that Mr.B has received the goods also and he will be eligible for taking the Input tax credit.
Andthe place of supply of such goods shall be the principal place of business of such persontherefore MR.A will charge IGST in Invoice to MR.B who is giving the direction to ship goods to Mr.C.
MR.B will charge IGST in invoice to MR.C who is registered in UP and MR.C will be eligible for credit of goods already received by him.
Example-2; Movement of goods outside the state.
Mr. A is a supplier in U.P. Mr. B, who is registered in Delhi approached Mr. A and asked him that he wants to buy goods but goods are to be delivered to Mr. C, who is in Rajasthan.
Bill to – Mr. B
Ship to Mr. C
It shall be deemed that Mr.B has received the goods also and he will be eligible for taking the Input tax credit.
And the place of supply of such goods shall be the principal place of business of such persontherefore MR.A will charge IGST in Invoice to MR.B who is giving the direction to ship goods to Mr.C.
MR.B will charge IGST in invoice to MR.C who is registered in Rajasthan and MR.C will be eligible for credit of goods already received by him.
Example-3; Bill to HO and ship to branch office;
The implication will be the same as discuss above, because branch shall be treated as distinct person in GST.
Example-4;-Goods bill to and ship to same person, but address of delivery of goods is in different state.
The clause (b) of sec 10 shall not apply in case of bill to and ship to be to same person. For applicability of this clause three distinct person is necessary.
Suppose Mr.B is contractor registered in Delhi, who provides construction service in UP to MR.C and he purchase cement bags from MR.A the supplier registered in UP,and sends directly to construction site at UP.
Now, Mr.A supplier of UP will charge CGST for the transaction, as the movement of goods terminate in UP for delivery of goods to Mr.B according to clause (a) of sec 10.For taking the credit of goods purchase from UP, MR.A has to take registration in UP.
As regards second supply Mr.B to Mr.C, IGST will be charge by B, in invoice to C, according to POS of Service.
Analysis and Implications of clause (a) and (c)

• where the supply involves movement of goods, whether by the supplier or therecipient or by any other person, the place of supply of such goods shall be the location of the goods at the time at which the movement of goods terminates for delivery to the recipient;

The GST is destination based consumption Tax that means tax would go to the state where goods are ultimately consumed by consumer. Tax will flow with the goods.
The meaning of word for delivery to the recipient,shall be construe in its real sense.

1. When the goods moved by supplier

We should read as where supply involves movement of goods by supplier, POS of goods shall be the location of goods at the time at which the movement of goods terminates for delivery to the recipient.

2. When the goods moved by recipient then the wordsfor delivery to the recipient has no significance.

We should read as where supply involves movement of goods by recipient, POS of goods shall be the location of goods at the time at which the movement of goods terminates for delivery to the recipient.
Ex-factory or Over the counter sale
A transaction where the supplier is responsible for making goods available at its factory site. The title, risk and possession of the goods are transferred by the supplier to the recipient at the suppliers factory gate, where after the recipient is responsible for transportation of goods up to the destination.
We take an example where Mr. A is a builder, registered person of Delhi has a contract for building a complex. He purchase cement bags on ex-factory basis from MR.S the supplier in UP that he will take the goods in Delhi. He will give the address of delivery of goods at Delhi. The supply shall be liable for IGST because movement of goods terminate at Delhi.
The clause 10(a) never emphasizes where risk and reward is transfer. In CST regime also transfer of property in goods is not the criteria in determining the Interstate sale. SC in case of Oil India corporation Vs superintendent of Tax held that it is immaterial in which state the property of goods pass to the recipient.
Presumption that purchaser must have diverted the goods after taking delivery, onus to prove is on revenue.
Gujarat High Court in case Commissioner Of Sales Tax vs Pure Beverages Ltd. on 3 December, 2004 held in case Of Ex factory sale under CST Act,The Revenue would like the court to raise a presumption that the purchaser must have diverted the goods after having taken delivery of the same at the factory gate. Not only does the Revenue fail in discharging the onus which is on it, but the presumption that it wants to draw is far-fetched in absence of any evidence to show that such an exercise had been undertaken by the purchaser. The assessee herein, namely, the selling dealer had submitted “C” forms. It was open to the department to verify the genuineness of the transaction; call upon the purchasers, who are registered dealers, and seek evidence to satisfy itself as to whether goods had in fact moved or not from this State to State of Rajasthan. The department does not undertake the requisite exercise, ignores the evidence produced by the assessee and merely presumes a state of affairs not warranted in law or on facts.In the circumstances, it is not possible to accept the submissions made on behalf of the Revenue that the transactions in question did not amount to inter-State sale.
STATEMENT OF OBJECTS AND REASONS OF IGST Bill Nov, 2017

1. The crucial aspect of central sales tax is that it is non-vatable, i.e. the credit of this tax is not available as set-off for the future tax liability to be discharged by the purchaser. It directly gets added to the cost of the goods purchased and becomes part of the cost of business and thereby has a direct impact on the increase in the cost of production of a particular product. Further, the fact that the rate of central sales tax is different from the value added tax being levied on the intra-State sale creates a tax arbitrage which is exploited by unscrupulous elements.
2. In view of the above, it has become necessary to have a Central legislation, namely, the Integrated Goods and Services Tax Bill, 2017. The proposed Legislation will confer power upon the Central Government for levying goods and services tax on the supply of goods or services or both which takes place in the course of inter-State trade or commerce. The proposed Legislation will remove both the lacunas of the present central sales tax. Besides being vatable, the rate of tax for the integrated goods and services tax is proposed to be more or less equal to the sum total of the central goods and services tax and state goods and services tax or Union territory goods and servicestax to be levied on intra-State supplies. It is expected to reduce cost of production and inflation in the economy, thereby making the Indian trade and industry more competitive, domestically as well as internationally. It is also expected that introduction of the integrated goods and services tax will foster a common or seamless Indian market and contribute significantly to the growth of the economy.

(C) 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;
A transaction where the supply does not involve movement of goods is where manufacturer/supplier of goods develops moulds and jigs required for the manufacture of goods, sells the moulds and jigs to the recipient before using them for manufacture of goods, but does not move the same and uses the moulds for manufacture of goods for sale to the recipient. By application of Section 10 clause (C) of the model IGST Act the place of supply of such moulds and jigs will be the factory of the supplier.
CONCLUSION:The GST is destination based consumption Tax that means Tax will go to consuming state. The purpose of GST is free flow of goods between the states. India became one market with one tax rate. Some experts have given view that in case of ex-factory supply the POS shall be the place of suppliers state. If that view is taken then credit will not flow to other state, with the goods which is not the intention of law maker. GST hasovercome all the disputes which arose in CST regime and not to go back. We should take logical interpretation in case of ex- factory sale and to understand with the real soul and objective of GST Law. GST law should not make difference between Ex- Factory Supply and FOR Delivery Supply where the goods ultimately go outside the state. Therefore Ex-factory supply shall be liable for IGST because blocking of flow of credit has never been the intention of law where goods flow outside the state. We should correctly read the language of statute with its intention and should take a logical interpretation.
CA Amit Kumar
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Ph-9717129429