Taxation - GST Ch 04: Place Of Supply - Test 1: answer key

Question 1 · 2 marks · Taxation - GST Ch 04: Place Of Supply · hard

Scenario. Vikramaditya Tech Labs LLP (VTL) is a registered person under GST in Maharashtra with its manufacturing unit in Pune. VTL also has a branch office in Ahmedabad, Gujarat, which is separately registered under GST. During FY 2026-27, VTL undertook the following transactions: (i) Supplied 200 industrial machines to its Ahmedabad branch on 10 April 2026. The machines were transported from Pune to Ahmedabad and delivered at the branch premises. (ii) Received an order from Smt. Anuradha Sen of Kolkata, West Bengal (registered under GST) for supply of 50 machines. Smt. Sen directed VTL to deliver the machines to Aryan Steels Ltd. in Jamshedpur, Jharkhand. VTL delivered the machines to Aryan Steels Ltd. on 15 May 2026 and issued invoice to Smt. Sen. (iii) Sold 10 machines to Nandini Real Estates Pvt Ltd (NREPL) in Pune, Maharashtra, on 20 June 2026. The machines were already lying at NREPL's site in Pune and were sold on 'as is where is' basis; no movement took place. (iv) Entered into a contract with Sunrise Hospitality Ltd. in Bengaluru, Karnataka, for supply of 5 lifts at a price of ₹25,00,000. As per contract, VTL is responsible for installation of lifts at Sunrise's hotel site in Goa. The lifts were installed on 30 July 2026. All amounts are exclusive of GST. VTL is registered in Maharashtra and Gujarat only.

For transaction (i) of VTL supplying machines to its Ahmedabad branch, determine the place of supply and the nature of supply.

1. Pune, intra-state supply
2. Pune, inter-state supply
3. Ahmedabad, intra-state supply
4. Ahmedabad, inter-state supply (correct answer)

Answer: D — Ahmedabad, inter-state supply

Explanation. Step 1: Under Section 10(1)(a), where supply involves movement of goods, place of supply is the location where movement terminates for delivery. Here, movement terminates at Ahmedabad branch. Step 2: Location of supplier is Pune, Maharashtra; place of supply is Ahmedabad, Gujarat. Step 3: Since these are in two different States, Section 7(1)(a) treats it as inter-state supply. Step 4: The Pune and Ahmedabad establishments are distinct persons under Explanation 1 to Section 8, so the transfer is a supply; however, nature depends on location of supplier and place of supply.

Where it goes wrong. Assuming that supply to one's own branch is not a supply or is intra-state because the same LLP owns both establishments.

Authority. Section 10(1)(a) of the IGST Act, 2017; Section 7(1) of the IGST Act, 2017; Explanation 1 to Section 8 of the IGST Act, 2017

Question 2 · 2 marks · Taxation - GST Ch 04: Place Of Supply · hard

For transaction (ii) where Smt. Anuradha Sen directed VTL to deliver machines to Aryan Steels Ltd., what is the place of supply of VTL's supply to Smt. Anuradha Sen?

1. Jamshedpur, Jharkhand
2. Kolkata, West Bengal (correct answer)
3. Pune, Maharashtra
4. Ahmedabad, Gujarat

Answer: B — Kolkata, West Bengal

Explanation. Step 1: This is a bill-to-ship-to transaction. VTL (supplier) delivers goods to Aryan Steels Ltd. (recipient) on the direction of Smt. Anuradha Sen (third person). Step 2: Under Section 10(1)(b), it is deemed that the third person has received the goods, and the place of supply is the principal place of business of such third person. Step 3: Smt. Anuradha Sen's principal place of business is Kolkata, West Bengal. Hence, place of supply is Kolkata.

Where it goes wrong. Selecting Jamshedpur because that is where the goods were actually delivered; the deeming provision overrides actual delivery location.

Authority. Section 10(1)(b) of the IGST Act, 2017

Question 3 · 2 marks · Taxation - GST Ch 04: Place Of Supply · medium

For transaction (iii) of sale of machines lying at NREPL's site in Pune on 'as is where is' basis, determine the place of supply.

1. Mumbai, Maharashtra
2. Location of NREPL's registered office
3. Pune, Maharashtra (correct answer)
4. Location of VTL's warehouse

Answer: C — Pune, Maharashtra

Explanation. Step 1: The supply does not involve movement of goods; the machines are already at NREPL's site in Pune and are sold on 'as is where is' basis. Step 2: Under Section 10(1)(c), where supply does not involve movement of goods, place of supply is the location of such goods at the time of delivery to the recipient. Step 3: The machines are located in Pune at the time of delivery. Therefore, place of supply is Pune, Maharashtra.

Where it goes wrong. Applying Section 10(1)(a) as if movement occurred, or using the supplier's or recipient's registered office location.

Authority. Section 10(1)(c) of the IGST Act, 2017

Question 4 · 2 marks · Taxation - GST Ch 04: Place Of Supply · hard

For transaction (iv) of supply of lifts with installation at Sunrise Hospitality's hotel site in Goa, determine the place of supply and nature of supply.

1. Goa, inter-state supply (correct answer)
2. Bengaluru, intra-state supply
3. Pune, intra-state supply
4. Goa, intra-state supply

Answer: A — Goa, inter-state supply

Explanation. Step 1: The contract is for supply of lifts with installation at site. Under Section 10(1)(d), where goods are assembled or installed at site, place of supply is the place of such installation or assembly. Step 2: Installation is at Goa. Hence, place of supply is Goa. Step 3: Location of supplier VTL is Pune, Maharashtra. Step 4: Maharashtra and Goa are two different States; under Section 7(1)(a), the supply is inter-state. Step 5: Therefore, Goa, inter-state supply.

Where it goes wrong. Using the recipient's location Bengaluru or the supplier's location Pune, and treating the supply as intra-state because the recipient is in Karnataka.

Authority. Section 10(1)(d) of the IGST Act, 2017; Section 7(1) of the IGST Act, 2017

Question 5 · 2 marks · Taxation - GST Ch 04: Place Of Supply · medium

Scenario. Nandini Real Estates Pvt Ltd (NREPL) is a registered person in Karnataka, engaged in construction and sale of furniture. During FY 2026-27, NREPL entered into following transactions: (i) Purchased 100 office chairs from Ganesh Furniture Works, a registered supplier in Rajasthan, for ₹5,00,000. The chairs were transported from Rajasthan to NREPL's office in Karnataka and delivered on 5 August 2026. (ii) NREPL sold 50 modular workstations to Vikramaditya Tech Labs LLP (VTL) in Maharashtra. VTL instructed NREPL to deliver the workstations directly to VTL's client, Aryan Steels Ltd., in Jharkhand. NREPL delivered the workstations to Aryan Steels Ltd. on 20 September 2026 and raised invoice on VTL. (iii) NREPL sold an old generator to Aryan Steels Ltd. (registered in Jharkhand). The generator was lying at Aryan Steels' site in Jharkhand and was sold on 'as is where is' basis; no movement took place. (iv) NREPL supplied and installed 20 air conditioners at the office of Sunrise Hospitality Ltd. in Tamil Nadu. The contract price was ₹10,00,000. The ACs were installed on 15 November 2026. NREPL is registered in Karnataka only.

For transaction (i) of NREPL purchasing office chairs from Ganesh Furniture Works, Rajasthan, with delivery in Karnataka, determine the place of supply.

1. Rajasthan
2. Location of transporter
3. NREPL's registered office
4. Karnataka (correct answer)

Answer: D — Karnataka

Explanation. Step 1: The supply involves movement of goods from Rajasthan to Karnataka. Step 2: Under Section 10(1)(a), place of supply is the location of goods at the time when movement terminates for delivery to the recipient. Step 3: The chairs are delivered at NREPL's office in Karnataka; movement terminates there. Step 4: Therefore, place of supply is Karnataka.

Where it goes wrong. Selecting Rajasthan because the supplier is located there, or NREPL's registered office if it differs from delivery location.

Authority. Section 10(1)(a) of the IGST Act, 2017

Question 6 · 2 marks · Taxation - GST Ch 04: Place Of Supply · hard

For transaction (ii) where NREPL supplied workstations to VTL and delivered them to Aryan Steels Ltd. on VTL's instruction, what is the place of supply of NREPL's supply to VTL?

1. Jharkhand
2. Karnataka
3. Maharashtra (correct answer)
4. Rajasthan

Answer: C — Maharashtra

Explanation. Step 1: NREPL (supplier) delivers workstations to Aryan Steels Ltd. (recipient) on the direction of VTL (third person). Step 2: Under Section 10(1)(b), it is deemed that the third person has received the goods and place of supply is the principal place of business of such third person. Step 3: VTL's principal place of business is in Maharashtra. Step 4: Therefore, place of supply is Maharashtra.

Where it goes wrong. Selecting Jharkhand because goods were delivered there, or Karnataka because NREPL is located there.

Authority. Section 10(1)(b) of the IGST Act, 2017

Question 7 · 2 marks · Taxation - GST Ch 04: Place Of Supply · hard

For transaction (iii) of sale of an old generator lying at Aryan Steels' site in Jharkhand on 'as is where is' basis, determine the place of supply.

1. Karnataka
2. Jharkhand (correct answer)
3. Maharashtra
4. Rajasthan

Answer: B — Jharkhand

Explanation. Step 1: No movement of goods is involved; the generator is already lying at Aryan Steels' site in Jharkhand. Step 2: Under Section 10(1)(c), where supply does not involve movement of goods, place of supply is the location of goods at the time of delivery to the recipient. Step 3: The generator is located in Jharkhand at delivery. Step 4: Therefore, place of supply is Jharkhand.

Where it goes wrong. Selecting Karnataka because NREPL is registered there, or applying the bill-to-ship-to rule though there is no third-person direction.

Authority. Section 10(1)(c) of the IGST Act, 2017

Question 8 · 2 marks · Taxation - GST Ch 04: Place Of Supply · hard

For transaction (iv) of supply and installation of air conditioners at Sunrise Hospitality's office in Tamil Nadu, determine the place of supply and nature of supply.

1. Tamil Nadu, inter-state supply (correct answer)
2. Karnataka, intra-state supply
3. Tamil Nadu, intra-state supply
4. Karnataka, inter-state supply

Answer: A — Tamil Nadu, inter-state supply

Explanation. Step 1: The supply involves installation of air conditioners at site. Under Section 10(1)(d), place of supply is the place of installation. Step 2: Installation is at Tamil Nadu, so place of supply is Tamil Nadu. Step 3: NREPL's location of supplier is Karnataka. Step 4: Karnataka and Tamil Nadu are different States; under Section 7(1)(a), the supply is inter-state. Step 5: Therefore, Tamil Nadu, inter-state supply.

Where it goes wrong. Treating it as intra-state because the recipient Sunrise Hospitality may be in Tamil Nadu, ignoring that the supplier is in Karnataka.

Authority. Section 10(1)(d) of the IGST Act, 2017; Section 7(1) of the IGST Act, 2017

Question 9 · 2 marks · Taxation - GST Ch 04: Place Of Supply · medium

Scenario. During Tax Year 2026-27, a registered taxpayer is evaluating statutory compliance, computation of taxable income, and eligible tax deductions in accordance with the provisions of the Income-tax Act, 2025 and applicable rules for the May 2027 examination.

A registered supplier located in Delhi supplies goods to a registered recipient in Chandigarh (Union Territory). The goods are transported and delivered at the recipient's premises in Chandigarh. Determine the nature of supply.

1. Intra-state supply as both locations are in India
2. Intra-state supply as Delhi is also a Union territory
3. Inter-state supply only if the value exceeds the prescribed threshold
4. Inter-state supply as the supplier is in a State and place of supply is in a Union territory (correct answer)

Answer: D — Inter-state supply as the supplier is in a State and place of supply is in a Union territory

Explanation. Step 1: Location of supplier is Delhi, which is a State for GST purposes (NCT of Delhi). Step 2: Place of supply under Section 10(1)(a) is Chandigarh, a Union territory. Step 3: Section 7(1)(c) provides that where location of supplier and place of supply are in a State and a Union territory, the supply is inter-state. Step 4: Hence, the supply is inter-state; option (d) is correct.

Where it goes wrong. Thinking both are Union territories or that any supply within India is intra-state.

Authority. Section 7(1)(c) of the IGST Act, 2017; Section 8(1) of the IGST Act, 2017

Question 10 · 2 marks · Taxation - GST Ch 04: Place Of Supply · hard

Scenario. During Tax Year 2026-27, a registered taxpayer is evaluating statutory compliance, computation of taxable income, and eligible tax deductions in accordance with the provisions of the Income-tax Act, 2025 and applicable rules for the May 2027 examination.

M/s Aryan Steels Ltd. has two GST registrations in Maharashtra under the same PAN: one for its Mumbai unit and another for its Pune unit. It transfers goods from the Mumbai unit to the Pune unit. Determine the nature of supply.

1. Intra-state supply as location of supplier and place of supply are in the same State (correct answer)
2. Inter-state supply as the two registrations are distinct persons
3. Inter-state supply as two separate GSTINs are involved
4. Intra-state supply only if both units are in the same business vertical

Answer: A — Intra-state supply as location of supplier and place of supply are in the same State

Explanation. Step 1: The two registrations in Maharashtra are establishments of distinct persons under Explanation 1 to Section 8, so the transfer is a supply. Step 2: However, the nature of supply depends on location of supplier and place of supply. Step 3: Location of supplier is Mumbai, Maharashtra; place of supply under Section 10(1)(a) is Pune, Maharashtra. Step 4: Both are in the same State. Under Section 8(1), it is intra-state supply. Distinct persons status does not convert it into inter-state when both locations are within the same State.

Where it goes wrong. Treating any supply between distinct persons as inter-state, even when both establishments are in the same State.

Authority. Section 8(1) of the IGST Act, 2017; Explanation 1 to Section 8 of the IGST Act, 2017

Question 11 · 2 marks · Taxation - GST Ch 04: Place Of Supply · medium

Scenario. During Tax Year 2026-27, a registered taxpayer is evaluating statutory compliance, computation of taxable income, and eligible tax deductions in accordance with the provisions of the Income-tax Act, 2025 and applicable rules for the May 2027 examination.

Supplier A in Gujarat sells goods to B in Rajasthan. B instructs A to deliver the goods directly to C in Madhya Pradesh. A delivers the goods to C. What is the place of supply of A's supply to B?

1. Gujarat
2. Madhya Pradesh
3. Rajasthan (correct answer)
4. Location of C's registered office

Answer: C — Rajasthan

Explanation. Step 1: This is a bill-to-ship-to transaction. A supplies to B but delivers to C on B's direction. Step 2: Under Section 10(1)(b), it is deemed that B has received the goods, and place of supply is B's principal place of business. Step 3: B is in Rajasthan, so place of supply is Rajasthan. Step 4: Madhya Pradesh is only the delivery location and does not determine place of supply for A's supply to B.

Where it goes wrong. Selecting Madhya Pradesh because the goods were delivered there, ignoring the deeming rule.

Authority. Section 10(1)(b) of the IGST Act, 2017

Question 12 · 2 marks · Taxation - GST Ch 04: Place Of Supply · hard

Scenario. During Tax Year 2026-27, a registered taxpayer is evaluating statutory compliance, computation of taxable income, and eligible tax deductions in accordance with the provisions of the Income-tax Act, 2025 and applicable rules for the May 2027 examination.

A supplier in Karnataka supplies machinery to a recipient in Karnataka. As per the contract, the supplier must install the machinery at the recipient's site in Andhra Pradesh. The machinery is installed in Andhra Pradesh. Determine the place of supply and nature of supply.

1. Karnataka, intra-state supply
2. Andhra Pradesh, inter-state supply (correct answer)
3. Karnataka, inter-state supply
4. Andhra Pradesh, intra-state supply

Answer: B — Andhra Pradesh, inter-state supply

Explanation. Step 1: The supply involves assembly or installation at site. Under Section 10(1)(d), place of supply is the place of installation, i.e., Andhra Pradesh. Step 2: Location of supplier is Karnataka. Step 3: Karnataka and Andhra Pradesh are different States. Under Section 7(1)(a), the supply is inter-state. Step 4: Therefore, place of supply is Andhra Pradesh and nature is inter-state.

Where it goes wrong. Selecting Karnataka because both supplier and recipient are in Karnataka; installation site changes the place of supply.

Authority. Section 10(1)(d) of the IGST Act, 2017; Section 7(1) of the IGST Act, 2017

Question 13 · 2 marks · Taxation - GST Ch 04: Place Of Supply · medium

Scenario. During Tax Year 2026-27, a registered taxpayer is evaluating statutory compliance, computation of taxable income, and eligible tax deductions in accordance with the provisions of the Income-tax Act, 2025 and applicable rules for the May 2027 examination.

A supplier in Tamil Nadu sells goods to a registered recipient in Kerala. The goods are already lying at the recipient's premises in Kerala and are sold on 'as is where is' basis with no movement. Determine the place of supply.

1. Tamil Nadu
2. Location of supplier's warehouse
3. Location of recipient's registered office
4. Kerala (correct answer)

Answer: D — Kerala

Explanation. Step 1: No movement of goods is involved; goods are already at the recipient's premises in Kerala. Step 2: Under Section 10(1)(c), place of supply is the location of goods at the time of delivery to the recipient. Step 3: The goods are in Kerala at delivery. Step 4: Therefore, place of supply is Kerala, not Tamil Nadu.

Where it goes wrong. Using the supplier's location Tamil Nadu or the recipient's registered office if it is different from the location of goods.

Authority. Section 10(1)(c) of the IGST Act, 2017

Question 14 · 2 marks · Taxation - GST Ch 04: Place Of Supply · medium

Scenario. During Tax Year 2026-27, a registered taxpayer is evaluating statutory compliance, computation of taxable income, and eligible tax deductions in accordance with the provisions of the Income-tax Act, 2025 and applicable rules for the May 2027 examination.

A supplier in West Bengal supplies goods to a recipient in Assam. The goods are transported by a transporter and delivered at the recipient's warehouse in Assam. Determine the place of supply.

1. Assam (correct answer)
2. West Bengal
3. Location of transporter
4. Location of supplier's registered office

Answer: A — Assam

Explanation. Step 1: The supply involves movement of goods from West Bengal to Assam. Step 2: Under Section 10(1)(a), place of supply is the location where movement terminates for delivery to the recipient. Step 3: Movement terminates at the recipient's warehouse in Assam. Step 4: Therefore, place of supply is Assam.

Where it goes wrong. Selecting West Bengal because the supplier is located there, or the transporter's location.

Authority. Section 10(1)(a) of the IGST Act, 2017

Question 15 · 2 marks · Taxation - GST Ch 04: Place Of Supply · hard

Scenario. During Tax Year 2026-27, a registered taxpayer is evaluating statutory compliance, computation of taxable income, and eligible tax deductions in accordance with the provisions of the Income-tax Act, 2025 and applicable rules for the May 2027 examination.

A company registered in Delhi has a branch in Haryana, which is separately registered under GST. The company supplies goods from its Delhi unit to the Haryana branch. Determine the nature of supply.

1. Intra-state supply as both units belong to the same company
2. Intra-state supply as both locations are in India
3. Inter-state supply as the establishments are distinct persons (correct answer)
4. Inter-state supply only if the Haryana branch is separately registered

Answer: C — Inter-state supply as the establishments are distinct persons

Explanation. Step 1: Under Explanation 1 to Section 8, establishments in different States are treated as establishments of distinct persons. The Delhi and Haryana units are therefore distinct persons, and the transfer is a supply. Step 2: Location of supplier is Delhi; place of supply under Section 10(1)(a) is Haryana. Step 3: These are two different States; under Section 7(1)(a), the supply is inter-state. Step 4: Option (c) is correct; separate registration is not the reason—distinct person status arises from being in different States.

Where it goes wrong. Treating a branch transfer as not a supply or as intra-state because the same company owns both units.

Authority. Explanation 1 to Section 8 of the IGST Act, 2017; Section 7(1)(a) of the IGST Act, 2017

Question 16 · 2 marks · Taxation - GST Ch 04: Place Of Supply · hard

Scenario. During Tax Year 2026-27, a registered taxpayer is evaluating statutory compliance, computation of taxable income, and eligible tax deductions in accordance with the provisions of the Income-tax Act, 2025 and applicable rules for the May 2027 examination.

Supplier A in Maharashtra sells goods to B in Maharashtra. B instructs A to deliver the goods to C in Gujarat. A delivers the goods to C. What is the place of supply of A's supply to B?

1. Gujarat
2. Maharashtra (correct answer)
3. Location of C
4. Location of transporter

Answer: B — Maharashtra

Explanation. Step 1: This is a bill-to-ship-to transaction. A supplies to B but delivers to C on B's direction. Step 2: Under Section 10(1)(b), the place of supply is the principal place of business of B, the third person. Step 3: B is in Maharashtra. Therefore, place of supply is Maharashtra. Step 4: Even though delivery is in Gujarat, the deeming provision fixes place of supply at B's principal place of business.

Where it goes wrong. Selecting Gujarat because the goods are delivered there, or applying the movement rule instead of the bill-to-ship-to rule.

Authority. Section 10(1)(b) of the IGST Act, 2017

Question 17 · 2 marks · Taxation - GST Ch 04: Place Of Supply · medium

Scenario. During Tax Year 2026-27, a registered taxpayer is evaluating statutory compliance, computation of taxable income, and eligible tax deductions in accordance with the provisions of the Income-tax Act, 2025 and applicable rules for the May 2027 examination.

A supplier in Rajasthan supplies and installs goods at the recipient's site in Rajasthan. The contract is a composite supply of goods with installation. Determine the place of supply.

1. Location of supplier
2. Location of recipient
3. Location of transporter
4. Rajasthan (correct answer)

Answer: D — Rajasthan

Explanation. Step 1: The supply involves installation at site; it is a composite supply where the principal supply is goods to be installed. Step 2: Under Section 10(1)(d), place of supply is the place of installation or assembly. Step 3: Installation is in Rajasthan. Step 4: Therefore, place of supply is Rajasthan. The supplier's and recipient's locations are not the relevant proxies for this specific rule.

Where it goes wrong. Using the supplier's or recipient's location instead of the installation site, especially when both are in the same State.

Authority. Section 10(1)(d) of the IGST Act, 2017

Question 18 · 2 marks · Taxation - GST Ch 04: Place Of Supply · medium

Scenario. During Tax Year 2026-27, a registered taxpayer is evaluating statutory compliance, computation of taxable income, and eligible tax deductions in accordance with the provisions of the Income-tax Act, 2025 and applicable rules for the May 2027 examination.

A supplier in Gujarat sells goods to a registered recipient in Maharashtra. The goods are already lying at the recipient's premises in Maharashtra and are sold on 'as is where is' basis with no movement. Determine the place of supply.

1. Maharashtra (correct answer)
2. Gujarat
3. Location of recipient's registered office
4. Location of supplier's warehouse

Answer: A — Maharashtra

Explanation. Step 1: No movement of goods is involved; goods are at the recipient's premises in Maharashtra. Step 2: Under Section 10(1)(c), place of supply is the location of goods at the time of delivery to the recipient. Step 3: Goods are in Maharashtra at delivery. Step 4: Therefore, place of supply is Maharashtra, despite the supplier being in Gujarat.

Where it goes wrong. Selecting Gujarat because the supplier is located there, or the recipient's registered office if different from the location of goods.

Authority. Section 10(1)(c) of the IGST Act, 2017

Question 19 · 2 marks · Taxation - GST Ch 04: Place Of Supply · hard

Scenario. During Tax Year 2026-27, a registered taxpayer is evaluating statutory compliance, computation of taxable income, and eligible tax deductions in accordance with the provisions of the Income-tax Act, 2025 and applicable rules for the May 2027 examination.

In a bill-to-ship-to transaction, Supplier A in Delhi sells goods to B in Haryana. B directs A to deliver the goods to C in Punjab. A delivers the goods to C. What is the place of supply for B's supply to C?

1. Haryana
2. Delhi
3. Punjab (correct answer)
4. Location of A

Answer: C — Punjab

Explanation. Step 1: In a bill-to-ship-to transaction, there are two limbs. The first limb (A to B) is governed by Section 10(1)(b), but the second limb (B to C) is a separate supply. Step 2: For B's supply to C, goods move from A to C at B's direction. Step 3: Under Section 10(1)(a), place of supply is where movement terminates for delivery to C. Step 4: Movement terminates in Punjab. Therefore, place of supply for B's supply to C is Punjab.

Where it goes wrong. Applying the bill-to-ship-to rule again for the second limb and selecting Haryana (B's principal place of business) instead of the destination of goods.

Authority. Section 10(1)(a) of the IGST Act, 2017

Question 20 · 2 marks · Taxation - GST Ch 04: Place Of Supply · hard

Scenario. During Tax Year 2026-27, a registered taxpayer is evaluating statutory compliance, computation of taxable income, and eligible tax deductions in accordance with the provisions of the Income-tax Act, 2025 and applicable rules for the May 2027 examination.

A registered supplier in Andaman and Nicobar Islands supplies goods to a registered recipient in Lakshadweep. The goods are transported and delivered in Lakshadweep. Determine the nature of supply.

1. Intra-state supply as both locations are Union territories
2. Inter-state supply as the two locations are different Union territories (correct answer)
3. Intra-state supply as both locations are in India
4. Inter-state supply only if the supplier is registered in both Union territories

Answer: B — Inter-state supply as the two locations are different Union territories

Explanation. Step 1: Location of supplier is Andaman and Nicobar Islands, a Union territory. Step 2: Place of supply under Section 10(1)(a) is Lakshadweep, another Union territory. Step 3: Section 7(1)(b) provides that where location of supplier and place of supply are in two different Union territories, the supply is inter-state. Step 4: Therefore, it is inter-state supply. Intra-state under Section 8(1) requires the same State or same Union territory, which is not the case.

Where it goes wrong. Assuming that any supply between two Union territories is intra-state because both are not States.

Authority. Section 7(1)(b) of the IGST Act, 2017; Section 8(1) of the IGST Act, 2017