Place of supply for moving goods follows delivery destination, making the demand for CGST and KGST unsustainable.

For goods supplied under movement, the place of supply is the location where the movement terminates for delivery to the recipient under section 10(1)(a) of the IGST Act. The decisive factor is the delivery destination, not the point of handover to a common carrier. On the admitted facts, the goods moved outside Karnataka, so the supply was inter-State and IGST applied. Dealership terms, invoice conditions and the Sale of Goods Act did not override the statutory place-of-supply rule. A demand for CGST and KGST in addition to IGST would also result in double taxation, so the demand was held unsustainable and quashed.

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Issues: Whether the demand of CGST and KGST in respect of OBS 1090810 was sustainable when the goods were supplied under inter-State movement and IGST had already been paid.

Analysis: Section 10(1)(a) of the Integrated Goods and Services Tax Act, 2017 fixes the place of supply, in cases involving movement of goods, at the location where such movement terminates for delivery to the recipient. The decisive factor is not the point at which goods are handed over to a common carrier, but the destination at which the recipient can take delivery. On the admitted facts, the goods moved to destinations outside Karnataka, making the supply inter-State. The reliance placed on the dealership terms, invoice conditions and provisions of the Sale of Goods Act, 1930 did not displace the statutory rule governing place of supply. The demand would also amount to double taxation where IGST had already been paid.

Conclusion: The demand under OBS 1090810 for CGST and KGST was unsustainable and was quashed in favour of the assessee.

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