Authority for Advance Ruling — Ex factory inter-State supplies – The applicant, a manufacturer of cement, occasionally make inter-State sale of cement on ex factory/works basis from their plants. The applicant submitted that as per Sec. 10(1)(a) of IGST Act, 2017, place of supply shall be where movement of goods terminates, when they make ex-factory sales from their plant, delivery terminates at their factory gate itself and therefore, CGST and SGST should be charged on such type of supplies. However, further movement is carried by the recipient or transporter (other person) of goods up to the billing address state. Thus, the delivery in such cases terminates in other State and therefore they should charge IGST in respect of such supplies. The applicant sought an advance ruling regarding clarification as to what tax should be charged by them on ex-factory inter-State sales made by them.
Held that:- The Hon’ble Authority for Advance Ruling observed that the goods are made available by the supplier to the recipient at the factory gate, but this is not the point where movement terminates since the recipient subsequently assumes the charge for transportation of the goods up to the destination in another state and accordingly, held that IGST is chargeable on ex factory inter-State supplies.—Penna Cement Industries Limited, In Re… [2020] 22 TAXLOK.COM 112 (AAR-Telangana)