Case Law Details
Philips Carbon Black Limited Vs State of Kerala (Kerala High Court)
Kerala High Court held as per Section 10(1)(b) of the IGST Act, the place of supply of goods in case where the supply is made on the direction of the 3rd person, it would be deemed as 3rd person has received the goods and the place of supply of such goods shall be the principal place of business of such 3rd person.
Facts- The petitioner, a dealer under the provisions of the Central Goods and Services Tax Act and Kerala Goods and Services Tax Act, 2017, has filed the present writ petition challenging the proceedings initiated under Section 149 of the CGST Act, 2017 on the ground that the proceedings are wholly without jurisdiction and without the authority of law.
The petitioner has challenged communication whereby the petitioner has been intimated by the 2nd respondent in response to the letter of the petitioner dated nil that since the destination of the transport is Kannur in Kerala, therefore, the supply being a taxable supply, SGST component of the GST is creditable to Kerala State. It is also stated in the said communication that if supply is not a taxable supply, for job work as claimed by the petitioner, the supplier should issue the supply documents (Delivery challan), the details of which have to be reflected in the accounts records of the consignee. Without this supply document, the nature of supply, the accountability of the transaction and also the further movement of goods at the hands of the consignee cannot be monitored by the department. In the absence of an online declaration like KER -1, E way bill etc. the monitoring of the further movement of the goods becomes more difficult.
Conclusion- In case, where the supply is made on the direction of a 3rd party, then place of the principal or the 3rd party shall be the place of supply as per Section 10(1)(b) of the IGST Act. In the present case, the delivery of goods was destined to M/s. Carbomix Polymers (India) Pvt. Limited, Kannur, Kerala, on instructions by MRF Limited to whom the goods were sold and invoice was issued in the name of MRF Limited. Thus, the supply of goods in the present case was inter-state supply and not intra-state supply and the same would attract the tax under the IGST Act.
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