Place of Supply

XYZ is registered with GST in Maharashtra. XYZ is supplying the goods to PQR who is the buyer of the goods. PQR is registered with GST in Maharashtra. XYZ issuing invoice to PQR on ex – works basis and handing over the goods at factory gate in Maharashtra. In the invoice, XYZ is mentioning PQR as buyer but consignee is not mentioned even though XYZ is aware that PQR will be in turn supplying the goods to a customer outside Maharashtra. As per the recent ruling of the ‘Authority of Advance Ruling, Telangana’ in the case of ‘Penna Cement Industries’, manufacturer of cement, makes inter-State sales of cement on ex- factory/work basis. The question before the AAR was, 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. As per AAR Ruling, IGST is chargeable on ex-factory inter-State supplies. However, in my view, in the case of Penna Cement, the customer was located in different state which had lifted the delivery on ex – factory basis from another state and therefore IGST is chargeable. However, in my example given above, XYZ and PQR both are in same state i.e. Maharashtra and therefore even though PQR is taking the delivery ex – factory and even though PQR is ultimately selling the goods to a customer in different state, since XYZ and PQR both are in Maharashtra, XYZ need to charge CGST + SGST. Guidance of the experts please on my views.