Examine the following independent scenarios and answer the questions given thereon: (i) M/s Sea Foods Limited, registered in the State of Tamilnadu,…

CA Final · Indirect Tax Laws · PYQS · September 2025
Examine the following independent scenarios and answer the questions given thereon: (i) M/s Sea Foods Limited, registered in the State of Tamilnadu, made a supply of goods to M/s Eat Well Limited, registered in State of Maharashtra. The supply was made in the territorial waters, where appropriate baseline was situated within 4 nautical miles from the State of Kerala and 12 nautical miles from the State of Tamilnadu. Determine the place of supply with proper reasoning. (ii) M/s Speed Logistics gave on hire its tipper lorries to M/s ABC, a mining firm for transporting minerals from mining pit head to railway siding. Vehicle was given with driver but fuel cost was to be borne by the recipient. M/s Speed Logistics considered this transaction as exempt supply since it was covered under the entry of transportation of goods by road except by GTA in the exemption notification. Examine the correctness of this treatment.

Suggested Answer and Working Notes:

(i) Where the place of supply is in the territorial waters, the place of supply shall be deemed to be in the coastal State or Union territory where the nearest point of the appropriate baseline is located. Since in the given case, appropriate baseline is located within 4 nautical miles from Kerala and 12 nautical miles from Tamil Nadu, place of supply is Kerala. (ii) In case of hiring of vehicle, the person taking vehicle on rent defines how and when the vehicles will be operated, determines schedules, routes and other operational considerations. Therefore, the person giving the vehicles on rent with operator for a specified period of time cannot be considered to be supplying the service by way of transport of goods by road; he is supplying service of renting of transport vehicles with operator, which is not exempt. Thus, in the given case, treatment done by M/s Speed Logistics is not correct since services provided by M/s Speed Logistics are not exempt; they are taxable.

Topics: Place of Supply

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