Time of Supply – CA Inter Tax Question Bank is designed strictly as per the latest syllabus and exam pattern.
Time of Supply – CA Inter Tax Question Bank
Question 1.
M/s Mansh & Vansh Trading Company, a registered supplier, is liable to pay GST under forward charge. Determine the time of supply from the following information furnished by it:
(i) Goods were supplied on 03-10-2020
(ii) Invoice was issued on 05-10-2020
(iii) Payment received on 09-10-2020 (May 2018, 4 marks)
Answer:
In case of supply of goods, the time of supply of goods shall be earlier of the following:
(a) Date of issue of Invoice i.e. (05.10.2020) or
(b) the last date by which invoice needs to be issued i.e. (03.10.2020 being delivery of goods)
(c) Receipt of payment by supplier(date of credit in the bank account or date of payment-as entered in books of account of supplier) i.e. 09.10.2020
Hence the time of supply is 03.10.2020.
Question 2.
Know & Grow Publishers, a registered dealer in India, paid an advance ₹ 50,000 to Mr. Ganatra, an author, for the copyright covered under Section 13(1) (a) of the Copyright Act, 1957, of his original literary work on 5-9-2020. It made the balance payment ₹ 1,50,000 on 12-12- 2020. You are required to determine the time of supply, if Mr. Ganatra raised the invoice on :
(i) 6-10-2020, or
(ii) 17-12-2020 (Nov 2019, 4 marks)
Answer:
(a) GST on supply of services by an author by way of transfer or permitting the use of enjoyment of a copyright covered under section 13(1 )(a) of the Copyright Act, 1957 relating to original literary works to a publisher is payable under reverse charge by such publisher, i.e., Known & Grow Publishers.
The time of supply of service, on which GST is payable under reverse charge, is earlier of the following:
(a) Date of payment as entered in the books of account of the recipient or date on which payment is debited from’ the bank account, whichever is earlier
Or
(b) 61st day from the date of issue of invoice by the supplier
- If the invoice is issued on 06-10-2020, time of supply is as under:
- For the payment of ₹ 50,000: 05-09-2020 (earlier of date of payment and 61st day from date of issue of invoice)
- For the payment of ₹ 1,50,000 : 06-12-2020 (earlier of date of payment and 61st day from date of issue of invoice)
- If the invoice is issued on 17-12-2020, time of supply is as under:
- For the payment of ₹ 50,000 : 05-09-2020 (earlier of date of payment and 61st day from date of issue of invoice)
- For the payment of ₹ 1,50,000 : 12-12-2020 (earlier of date of payment and 61st day from date of issue of invoice)
Question 3.
I have received the payment but I have not deposited the cheque in the bank account. What is the date of receipt of payment?
Answer:
The date of receipt of payment is date of entry in the books or date of credit in the bank account whichever is earlier.
Question 4.
What is the rate of GST to be charged on advances received before the change in rate of tax if the supply is completed after the change is rate of tax?
Answer:
If the invoices is also raised before the change in rate of tax then the old rate will be applicable even though the supply is complete after the change in rate of tax. Else, the new rate will be applicable.
Question 5.
Is it required to distinguish whether a particular supply involves supply of goods or services or both?
Answer:
Yes. The CGST Act, 2017 specifies certain provisions separately for supply of goods and supply of services viz., Section 12 and Section 13 provides for ascertaining time of supply of goods and time of supply of services respectively; similarly separate provisions have been specified for ascertaining place of supply of goods and place of supply of services.
Further, the rate of tax applicable to the supply of goods and supply of services may be different. Accordingly, it is important to distinguish whether a particular transaction involves supply of goods or supply of services.
Question 6.
What will be the time of supply where multiple invoices are issued for a single consignment involving supply of goods?
Answer:
The time of supply of goods shall be the date of issuance of invoice; or due date for issuance of invoice or receipt of payment by the supplier, whichever is earlier.
In the event, the supplier has not received the payment in case of multiple invoices issued for a single consignment of supply, the time of supply shall be earlier of date of issuance of invoice; or due date for issuance of invoice.
Question 7.
What will be the time of supply in case of supply of vouchers?
Answer:
In terms of Section 12(4) of the CGST Act, 2017, time of supply of vouchers shall be the earliest of the following:
(a) date of issue of voucher, if the supply is identifiable at that point; or-
(b) date of redemption of voucher, in all other cases.
Question 8.
What is time of supply with respect to escalation in price after the issuance of invoice (Eg: Invoice is issued for ₹ 5,000 on June 22,2020 by the supplier. Subsequently, due to variation in price the recipient pays scenario 1: ₹ 5,500 and scenario 2: ₹ 8,000)?
Answer:
In terms of the proviso to Section 12(2)(b) of the CGST Act, 2017, the time of supply with respect to the amount received in excess up to ₹ 1,000 of the amount indicated in tax invoice, the time of supply shall be the date of issue of invoice. Where the amount is received exceeds ₹ 1,000, the time of supply of goods shall be the earliest of the following:
(a) Date on which payment is entered in books of accounts of the supplier; or
(b) Date on which payment is credited to the bank account.
Accordingly, the time of supply in each of the scenarios given in the example would be as follows:
Scenario 1: The time of supply of goods with respect to the amount of₹ 500 received in excess shall be the date of invoice.
Scenario 2: The time of supply would be as follows:
| Date on which payment is entered in books of accounts of the supplier | July 30, 2020 | Time of supply shall be July 28, 2020 |
| Date on which payment is credited to the bank account | July 28, 2020 |
Question 9.
What would be the time of supply in case of works contract?
Answer:
In terms of entry (a) to clause 6 of schedule II, the works contract in relation to immovable property under the GST regime should be treated as supply of service. Accordingly, in terms of Section 13, the time of supply of services shall be the earliest of the following:
(a) Date of issue of invoice; or
(b) Due date of issue of invoice under Section 31; or
(c) Date when the payment entry in relation to supply of services is recorded in books of accounts; or
(d) Date on which the payment is credited to suppliers bank account.
Multiple Choice Question
Question 1.
When does the liability to pay GST arise in case of supply of goods?
(a) On raising of invoice
(b) At the time of supply of goods
(c) On receipt of payment
(d) Earliest of (a), (b) or (c)
Answer:
(b) At the time of supply of goods
Question 2.
What is time of supply of goods under CGST Act, 2017?
(a) Date of issue of invoice
(b) Date of receipt of consideration by the supplier
(c) Date of dispatch of goods
(d) Earlier of (a) & (b)
Answer:
(d) Earlier of (a) & (b)
Question 3.
What is time of supply of goods liable to tax under reverse charge mechanism?
(a) Date of receipt of goods
(b) Date on which the payment is made
(c) Date immediately following 30 days from the date of issue of invoice by the supplier
(d) Earlier of a/b/c
Answer:
(d) Earlier of a/b/c
Question 4.
What is the time of supply of vouchers when the supply with respect to the voucher is identifiable?
(a) Date of issue of voucher
(b) Date of redemption of voucher
(c) Earlier of (a) &(b)
(d) (a) & (b) whichever is later
Answer:
(a) Date of issue of voucher
Question 5.
What is the time of supply of vouchers when the supply with respect to the voucher is not identifiable?
(a) Date of issue of voucher
(b) Date of redemption of voucher
(c) Earlier of (a) &(b)
(d) (a) and (b) whichever is later
Answer:
(b) Date of redemption of voucher
Question 6.
What is date of receipt of payment?
(a) Date of entry in the books
(b) Date of payment credited into bank account
(c) Earlier of (a) and (b)
(d) Date of filing of return
Answer:
(c) Earlier of (a) and (b)
Question 7.
Mr. A supplies goods worth ₹ 24,300 to Mr. B and issues an invoice dated 25.7.2020 for ₹ 24,300 and Mr. B pays ₹ 25,000 on 30.7.2020 against such supply of goods. The excess ₹ 700 (being less than ₹ 1,000) is adjusted in the next invoice for supply of goods issued on 5.8.2020. Identify the time of supply and value of supply:
(a) ₹ 25,000 – 30.7.2020
(b) For ₹ 24,300 – 25.7.2020 and for ₹ 700 – 30.7.2020
(c) ₹ 25,000 – 25.7.2020
(d) For ₹ 24,300 – 25.7.2020 and for ₹ 700 – 5.8.2020
Answer:
(c) ₹ 25,000 – 25.7.2020
Question 8.
How is the date of receipt of consideration by the supplier determined?
(a) Date on which the receipt of payment is entered in the books of account
(b) Date on which the receipt of payment is credited in the bank account
(c) Earlier of (a) and (b)
(d) (a) and (b) whichever is later
Answer:
(c) Earlier of (a) and (b)
Question 9.
What is the time of supply of service in case of reverse charge mechanism?
(a) Date of which payment is made to the supplier
(b) Date immediately following 60 days from the date of issue of invoice
(c) Date of invoice
(d) Earlier of (a) and (b)
Answer:
(d) Earlier of (a) and (b)
Question 10.
What is the time supply of service in case an associated enterprise receives services from the service provider located outside India?
(a) Date of entry in the books of account of associated enterprise (recipient)
(b) Date of payment
(c) Earlier of (a) and (b)
(d) Date of entry in the books of the supplier of service
Answer:
(c) Earlier of (a) and (b)
Question 11.
What is the time of supply of vouchers when the supply with respect to the voucher is identifiable?
(a) Date of issue of voucher
(b) Date of redemption of voucher
(c) Earlier of (a) and (b)
(d) (a) and (b) whichever is later
Answer:
(a) Date of issue of voucher
Question 12.
What is the time of supply of vouchers when the supply with respect to the voucher is not identifiable?
(a) Date of issue of voucher
(b) Date of redemption of voucher
(c) Earlier of (a) and (b)
(d) (a) and (b) whichever is later
Answer:
(b) Date of redemption of voucher
Time of Supply Notes
Time of supply where tax is payable under forward charge
Time of supply of goods [Section 12(2)]
Earliest of the following:
(a) Date of issue of invoice by the supplier or the last date on which he is required, to issue the invoice with respect to the supply
(b) Date on which the supplier receives the payment (entering the payment in books of account or crediting of payment in bank account, whichever is earlier) with respect to the supply
No GST on advances received for supply of goods: In case of supply of goods by a registered person (excluding composition supplier), GST is to be paid on the outward supply of goods on the date of issue of invoice or the last date on which invoice ought to have been issued in terms of Section 31 [Notification No. 66/2017 CT dated 15.11.2017].
Time of supply of services [Section 13(2)]
(a) Invoice issued within the prescribed time period Earliest of the following:
- Date of issue of invoice by the supplier
- Date of receipt of payment (entering the payment in books of account or crediting of payment in. bank account, whichever is earlier)
(b) Invoice not issued within the prescribed time period Earliest of the following:
- Date of provision of service
- Date of receipt of payment (entering the payment in books of account or crediting of payment in bank account, whichever is earlier)
(c) When the above events are unascertainable
- Date on which the recipient shows the receipt of services in his books of account
- Time for payment of tax in case of joint development agreements in real estate sector
In case of-
- supply of development rights against consideration in the form of construction service of complex, building or civil structure;
- supply of construction service of complex, building or civil structure against consideration in the form of transfer of development rights
GST is to be paid at the time when the possession or right in the property is transferred to the land owner by entering into a conveyance deed or similar instrument (e.g. allotment letter)
General time limit for raising invoices
Supply of goods
Before or at the time of,
(a) removal of goods for supply to the recipient, where the supply involves movement of goods, or
(b) delivery of goods or making available thereof to the recipient, in any other case
Supply of services
Before or after the provision of service but within 30 days [45 days in case of insurance cos./banking and financial institutions including NBFCs] from the date of supply of services
Time of supply where tax is payable under Reverse Charge
| Time of supply of goods [Section 12(3)] | Time of supply of services [Section 13(3)] |
| Earliest of the following:
(a) Date of receipt of goods, or (b) Date of payment as entered in the books of account of the recipient or the date on which the payment is debited to his bank account, whichever is earlier, or (c) 31st day from the date of issue of invoice |
Earliest of the following:
(a) Date of payment as entered in the books of account of the recipient or the date on which the payment is debited to his bank account, whichever is earlier, or (b) 61st day from the date of issue of invoice |
| Where the above events are not ascertainable, the time of supply shall be the date of entry in the books of account of the recipient of supply | |
| Import of service from associated enterprise
Date of entry in the books of account of the recipient or the date of payment, whichever is earlier |
|
Time of supply of vouchers exchangeable for goods and services
Supply of vouchers exchangeable for goods and services [Sections 12(4) and 13(4)]
(a) Supply of goods or services is identifiable at the time of issue of voucher
- Date of issue of the voucher
(b) Other cases
- Date of redemption of the voucher
Time of supply of goods and services in residual cases
Supply of goods and services in residual cases [Sections 12(5) and 13(5)]
(a) Where a periodical return is required to be filed
- Due date of filing such return.
(b) Other cases
- Date of payment of tax
Time of supply for addition in value by way of interest/ late fee/penalty for delayed payment of consideration
Addition in value by way of interest, late fee/penalty for delayed payment of consideration
Time of Supply =» Date on which the supplier receives such addition in value
The provisions relating to time of supply of vouchers that are exchangeable for goods are same as that of the vouchers that are exchangeable for services. Similarly, the provisions relating to time of supply of goods falling in the residual category are same as that of the time of supply of services falling in the residual category.
Also, provisions relating to time of supply for addition in value by way of interest, late fee/penalty for delayed payment of consideration are same for goods and services.
Furthermore, concepts like option of taking invoice date as time of supply in case of excess payment upto ₹ 1000, meaning of “Date of receipt of payment”, significance of words “to the extent the payment covers the services” are also same for goods and services.