Time of Supply – CA Inter Tax Study Material

Time of Supply – CA Inter Tax Study Material is designed strictly as per the latest syllabus and exam pattern.

Time of Supply – CA Inter Taxation Study Material

Question 1.
A machine has to be supplied at site. It is done by sourcing various components from vendors and assembling the machine at site. The details of the various events are:

17th September	Purchase order with advance of ₹ 50,000 is received for goods worth ₹ 12 lakh and entry duly made in the seller’s books of account
20th October	The machine is assembled, tested at site, and accepted by buyer
4th November	Balance payment of ₹ 11,50,000 received

Determine the time of supply(ies) in the above scenario for the purpose of payment of tax.
Answer:
Statutory Provision:
As per Notification No. 66/2017 CT dated 15.11.2017, a registered person (excluding composition supplier) has to pay GST on the outward supply of goods at the time of supply as specified in section 12(2)(a) i.e., date of issue of invoice or the last date on which invoice ought to have been issued in terms of section 31.

In the given case:
The time of supply of goods for the entire amount of ₹ 12,00,000 is 20th October which is the date on which the goods were made available to the recipient as per section 31(l)(b), and the invoice should have been issued on this date [Section 12(2)(a)].

Question 2.
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: [May 2018 Modified, 4 Marks]

1. 1. Goods were supplied on 03-10-2020
   2. Invoice was issued on 05-10-2020
   3. Payment received on 09-10-2020

Answer:

Statutory Provision	In the given case
As per Notification No. 66/2017-CT, dated 15.11.2017, a registered person (excluding composition supplier) has to pay GST on the outward supply of goods at the time of supply as specified in section 12(2)(a) i.e., date of issue of invoice or the last date on which invoice ought to have been issued in terms of section 31.	(a)Actual date of issue of invoice: 05-10-2020 (b) Last date as per section 31(1)(b): 03-10-2020 Time of supply of goods is 3rd October, 2020

Question 3.
Ms. Antira, a registered person, supplied certain goods to Mr. G also a registered person. The tax in respect of the said goods is liable to be paid on Reverse Charges basis.
Other details of the transaction are as under:

(a)	Date of the receipt of goods by Mr. G	26.11.2020
(b)	Date on which the payment is made and entered in the books of account by Mr. G	22.12.2020
(c)	Date when the payment is debited in bank account of Mr. G	24.12.2020
(d)	Date of issue of invoice by Ms. Antira, the supplier.	20.11.2020
(e)	Date immediately following 30 days from the date of issue of invoice by the supplier.	21.12.2020

You are required to determine the time of supply of goods under reverse charge basis.
Answer:
As per section 12(3) of CGST Act, 2017
Time of supply of, shall be earlier of the following:

• Date of the recipient of goods
• The Date of payment
• Date immediately following 30 days from the date of issue of invoice by the Supplier

(a)	Date of the recipient of goods by Mr. G	26.11.2020
(b)	Date on which the payment is made and entered in the books of account by Mr. G.	22.12.2020
(c)	Date when the payment is debited in the bank account of Mr. G	24.12.2020
(d)	Date immediately following 30 days from the date of issue of invoice by the Supplier (Ms. Antira)	21.12.2020
	Time of Supply (Earliest)	26.11.2020

Question 4.
Determine the time of supply from the following particulars:

8th September	Community hall booked for a marriage, sum agreed ₹ 1,20,000, advance ₹ 20,000 recorded in the books of account.
10th September	Advance amount credited in bank account.
2nd November	Marriage held in the Community hall.
18th December	Invoice issued for ₹ 1,20,000 indicating the balance of ₹ 1,00,000 payable
22nd December	Balance ₹ 1,00,000 recorded in the books of account.
24th December	Payment ₹ 1,00,000 credited to the bank account

Answer:
Statutory Provision:

Clause	Case	Time of Supply
(a)	If the invoice is issued within the period prescribed under Section 31(2). [As per section 31(2), A tax invoice is to be issued within 30 days of supply of service.]	The date of issue of invoice by the supplier OR The date of receipt of payment whichever is EARLIER
(b)	If the invoice is not issued within the period prescribed under Section 31(2)	The date of provision of service OR The date of receipt of payment whichever is EARLIER
(c)	If Above two clauses (a) and (b) do not apply	The date on which the recipient shows the receipt of services in his books of account

Time of supply for Advance money received:
The time of supply of service to the extent of advance of ₹ 20,000 is 8th September (date of recording the payment in the books of account) as it is earlier than the date of crediting of payment in the bank account and the date of provision of service.

Time of supply for Advance money received:
The time of supply of service to the extent of the balance ₹ 1,00,000 is 2nd November, which is the date of provision of service as it is earlier than the other two events in this case.

Question 5.
Jindal Consultancy services, provides the following details:

		Case I	Case II
1.	Date of Supply of Services	19-1-2020	16-12-2019
2.	Date of issue of Invoice	29-1-2020	28-1-2020
3.	Date of entering the payment in the books of supplier	6-2-2020	29-1-2020
4.	Date of credit of payment in bank account	5-2-2020	1-2-2020

Determine the time of supply of services in both the cases.
Answer:
On the basis of provisions of section 13(2) of CGST Act, 2017, firstly it has to be seen whether the invoice has been issued within the prescribed time limit of 30 days. In the given question, the invoice has been issued within time limit in case I but not in case II. Therefore, in case II, the date of supply of service shall be considered and not the date of invoice. The POS can be determined as follows:

		Case I	Case II
1.	Date of Supply of Services	Not Applicable	16-12-2019
2.	Date of issue of Invoice	29-1-2020	Not Applicable
3.	Date of entering the payment in the books of supplier	6-2-2020	29-1-2020
4.	Date of credit of payment in bank account	5-2-2020	1-2-2020
Time of supply (Earliest of all the dates)		29-1-2020	16-12-2019

Question 6.
Determine the time of supply from the given information.

6th May	Booking of convention hall, sum agreed ₹ 15,000, advance of ₹ 3,000 received
15 th September	Function held in convention hall
27th October	Invoice issued for ₹ 15,000, indicating balance of ₹ 12,000 payable
3rd November	Balance payment of ₹ 12,000 received

Answer:
Statutory Provision

• As per section 31(2) read with rule 47 of CGST Rules, the tax invoice is to be issued within 30 days of supply of service. In the given case, the invoice is not issued within the prescribed time limit.
• As per section 13(2)(b), in a case where the invoice is not issued within the prescribed time, the time of supply of service is the date of provision of service or receipt of payment, whichever is earlier.

Time of supply for ₹ 3,000 received:
The time of supply of service to the extent of ₹ 3,000 is 6th May as the date I of payment of ₹ 3000 is earlier than the date of provision of service.

Time of supply for ₹ 12,000 received:
The time of supply of service to the extent of the balance ₹ 12,000 is 15th September which is the date of provision of service.

Question 7.
M/s XYZ & Co., a firm of Chartered Accountants, issued invoice for services rendered to Mr. A on 7th September, 2020. Determine the Time of Supply in the following independent cases :  [Nov. 2018 Old Course Modified, 5 Marks]

1. The provision of service was completed on 1st August, 2020.
2. The provision of service was completed on 14th August, 2020.
3. Mr. A made the payment on 3rd August, 2020 where provision of service was remaining to be completed.
4. Mr. A made the payment on 15th September, 2020 where provision of service was remaining to be completed.

Answer:
Statutory Provision:

Clause	Case	Time of Supply
(a)	If the invoice is issued within the period prescribed under Section 31(2). [As per section 31 (2), A tax invoice is to be issued within 30 days of supply of service.]	The date of issue of invoice by the supplier OR The date of receipt of payment whichever is EARLIER
(b)	If the invoice is not issued within the period prescribed under Section 31(2)	The date of provision of service OR The date of receipt of payment whichever is EARLIER
(c)	If above two clauses (a) and (b) do not apply	The date on which the recipient shows the receipt of services in his books of account

In accordance with aforesaid provisions, time of supply is:

Case	Time of Supply	Explanation
(1)	01.08.2020	Since the invoice is not issued within 30 days of supply of service.
(2)	07.09.2020	Since the invoice is issued within 30 days of supply of service.
(3)	03.08.2020	viz. earlier of 07.09.2020 or 03.08.2020
(4)	07.09.2020	viz. earlier of 07.09.2020 or 15.09.2020

Question 8.
M/s Pranav Associates, a Partnership Firm, provided recovery agent service to Newtron Credits Ltd., an NBFC and a registered supplier, on 15th January, 2020. Invoice for the same was issued on 7th February, 2020 and the payment was made on 18th April, 2020 by Newtron Credits Ltd. Bank account of company was debited on 20th April, 2020. Determine the following: [Nov. 2019 Old Course, 4 Marks]

1. Person liable to pay GST
2. Time of supply of service

Answer:

	Statutory Provision	Answer
(1)	Tax on services supplied by a recovery agent to, inter alia, a non- banking finan­cial company is payable under reverse charge by such non-banking financial company.	Therefore, in the given case, person liable to pay GST is the NBFC – Newtron Credits Ltd.
(2)	The time of supply of service on which GST is payable on reverse charge basis is earlier of the following:- (a) Date of payment as entered in the books of account of the recipient (18th April, 2020) or the date on which the payment is debited in his bank account (20th April, 2020), whichever is earlier; (b) Date immediately following 60 days since issue of invoice by the supplier, i.e. 9th April, 2020	(a) 18th April, 2020 or 20th April, 2020, whichever is earlier. (b) 9th April, 2020 Thus, time of supply of service is 9th April, 2020.

Question 9.
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 5-9-2018. It made the balance payment ₹ 1,50,000 on 12-12-2018. You are required to determine the time of supply, if Mr. Ganatra raised the invoice on : [Nov. 2019, 4 Marks]

1. 6-10-2018, or
2. 17-12-2018

Answer:
Statutory Provision:

• RCM.GST on supply of services by an author by way of transfer or permitting the use or enjoyment of a copyright covered under section 13(l)(<a) of the Copyright Act, 1957 relating to original literary works to a publisher is payable under reverse charge by such publisher, i.e. Know & Grow Publishers.
• TOS: 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

In the given case:

	If the invoice is issued on 06.10.2018,		If the invoice is issued on 17.12.2018
For the payment of	₹ 50,000	₹ 1,50,000	₹ 50,000	₹ 1,50,000
Date of Payment	05.09.2018	12.12.2018	05.09.2018	12.12.2018
61st day from date of issue of invoice	06.12.2018	16.02.2019	06.12.2018	16.02.2019
Time of supply	05.09.2018	06.12.2018	05.09.2018	12.12.2018

Question 10.
On 4th September, 2020, V.R. Mehman, a famous music composer, received ₹ 3 crore of consideration from Zilmil Music Co. Ltd. for sale of copyright of his original music album. He finished his work & made available the CD to the music company on 20th July, 2020 & raised the invoice on 24th July, 2020. What will be the time of supply as per CGST Act, 2017?
Note: Above Service is taxable under reverse charge basis. [May 2018 Old Course, 3 Marks]
Answer:
As per section 13 of CGST Act, 2017, the time of supply of service on which GST is payable on reverse charge basis is earlier of the following:
(a) Date of payment (04.09.2020), or
(b) Date immediately following 60 days since issue of invoice by the supplier (23.09.2020)
Thus, Time of Supply of services is 04.09.2020.