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Compiler on Section 13 - Time of supply of services

13.2 Determination of time of supply on services in case of forward charge

Question No.

Institute

Level

Term

QN

M

Example-1

NA

NA

NA

NA

NA

Question-1

ICSI

P

J18

5b

3

Repeated

ICMAI

F

D18

5b

4

Question-1A

ICSI

E

D19-O

90

1

Question-1B

ICAI

I

Ch5

11

NA

Question-2

ICAI

I

Ch5

6

NA

Question-2A

ICSI

P

J21

3e(iv)

1

Question-3

ICAI

F

M18-O

4b

4

Question-3A

ICSI

P

J21-O

4c

5

Question-3B

ICSI

P

D21-O

3d(i)

3

Question-3C

ICSI

E

J21-O

80

1

Question-4

ICSI

E

D20

69

1

Question-5

ICAI

I

Ch5

12

NA

Question-5A

ICAI

I

N18-O

8b

5

Question-5B

ICSI

P

D20

3b

4

Question-6

ICAI

I

Ch5

Ill

6

Question-7

ICAI

F

Ch6

5

NA

 

Example-1

Determine the time of supply in the following cases

SN

Date of Service

Inv Date

Payment receipts Date in Books

Credit date in Bank A/c

Remark

TOS

1

10 Jun

15 Jun

30 Jun

20 Jun

Since inv issued within 30 days, hence TOS shall be earlier of

Inv Date or

payment receipts date

15 Jun

2

10 Jun

7 Jul

30 Jun

20 Jun

Do

20 Jun

3

10 Jun

15 Jul

30 Jun

20 Jun

Inv not issued within 30 days, hence TOS shall be earlier of

Date of supply of service or

payment receipts date

10 Jun

 

Question-1 [ICSI-P-J18-5b-3] [ICMAI-F-D18-5b-4] [Inv issued after due date]

Harivallabh, a registered supplier, rendered taxable service for Rs.2 lakhs on 1-11-2017. The tax invoice was raised on 9-12-2017. Payment was received the next day. Ascertain the time of supply for GST purposes.

Answer

1) Statutory Provision

(i) Section-13(2)(a) - If invoice is issued within 30 days of supply of service as per section 31, TOS shall be earlier of

date of issue of invoice or

date of receipt of payment

(ii) Section-13(2)(b) - If invoice is not issued within 30 days of supply of service as per section 31, TOS shall be earlier of

date of supply of service, or

date of receipt of payment, or

(iii) Section 31(2) read with Rule 47 - RP supplying taxable services shall issue a tax invoice, before supply of service or within 30 days after the date of supply of service.

 

2) Facts & Advice

Date of supply of service = 01-11-2017

Due date of issue of invoice = 01-12-2017

Date of issue of Invoice = 09-12-2017

Date of receipts of payment = 10-12-2017

In the given case, invoice was issued after due date, hence time of supply of services shall be 01-11-2017 i.e. earlier of

date of supply of service (01-11-2017), or

date of receipt of payment (10-12-2017)

 

Question-1A [ICSI-E-D19-O-90-1]

What is the time of supply of service in the following case:

Date of issue of invoice 31-12-2018; Date of receipt of payment by supplier of service 20-12-2018. Date of provision of service 25-11-2018; and date of order 30-12-2018.

(A) 31-12-2018 (B) 20-12-2018 (C) 25-11-2018 (D) 30-12-2018

Answer

1) Statutory Provision

(i) Section-13(2)(a) - If invoice is issued within 30 days of supply of service as per section 31, TOS shall be earlier of

date of issue of invoice or

date of receipt of payment

(ii) Section-13(2)(b) - If invoice is not issued within 30 days of supply of service as per section 31, TOS shall be earlier of

date of supply of service, or

date of receipt of payment, or

(iii) Section 31(2) read with Rule 47 - RP supplying taxable services shall issue a tax invoice, before supply of service or within 30 days after the date of supply of service.

 

2) Facts & Advice

Date of supply of service = 25-11-2018

Due date of issue of invoice = 25-12-2018

Date of issue of Invoice = 31-12-2018

Date of receipts of payment = 20-12-2018

In the given case, invoice was issued after due date, hence time of supply of services shall be 25-11-2018 i.e. earlier of

date of supply of service (25-11-2018), or

date of receipt of payment (20-12-2018)

 

Question-1B [ICAI-I-Ch5-11]

Modern Security Co. provides service of testing of electronic devices. In one case, it tested a batch of devices on 4th and 5th Sep but could not raise invoice till 19th Nov because of some dispute about the condition of the devices on return. The payment was made in Dec.

What is the method to fix the time of supply of the service?

Answer

(1) Statutory Provision

(i) Section-13(2)(a) - If invoice is issued within 30 days of supply of service as per section 31, TOS shall be earlier of

date of issue of invoice or

date of receipt of payment

(ii) Section-13(2)(b) - If invoice is not issued within 30 days of supply of service as per section 31, TOS shall be earlier of

date of supply of service, or

date of receipt of payment, or

(2) Facts and Conclusion

Particulars

Date

Date of payment received in books

Dec

Date of payment credited in bank a/c

NA

Date of Provision of services

5th Sep

Date of Invoice

19th Nov

Due date of Invoice u/s 31

5th Oct

Inv Issued within due date

No

(3) Conclusion

Since invoice was not issued within due date as per section 13(2), hence TOS shall be 5th Sep i.e. earlier of date of provision of service, or date of receipt of payment.

 

Question-2 [ICAI-I-Ch5-6] [Inv issued after due date but advance received]

Raju Pvt Ltd. receives the order and advance payment on 5th Jan for carrying out an architectural design job. It delivers the designs on 23rd April. By oversight, no invoice is issued at that time, and it is issued much later, after the expiry of prescribed period for issue of invoice. When is the time of supply of service?

Answer

(1) Statutory Provision

(i) Section-13(2)(a) - If invoice is issued within period prescribed u/s 31, TOS shall be earlier of

date of issue of invoice or

date of receipt of payment

(ii) Section-13(2)(b) - If invoice is not issued within period prescribed u/s 31, TOS shall be earlier of

date of supply of service, or

date of receipt of payment, or

(2) Facts

Particulars

Date

Date of payment received in books

5th Jan

Date of payment credited in bank a/c

NA

Date of Provision of services

23rd April

Date of Invoice

NA

Due date of Invoice u/s 31

4th Feb

Inv Issued within due date

No

(3) Conclusion

Since invoice was not issued within due date as per section 13(2), hence TOS shall be 5th Jan i.e. earlier of date of provision of service, or date of receipt of payment.

 

Question-2A [ICSI-P-J21-3e(iv)-1]

Saroj consultancy services received advance of 50,000 from clients on 31.12.2020 for services to be rendered in the month of March, 2021. Determine TOS. [Ans: 31.12.2020]

 

Question-3 [ICAI-F-M18-O-4b-4] [Partly Advance & Inv issued after due date]

Determine the time of supply from the following particulars:

8th Sep

Community hall booked for a marriage, sum agreed Rs.1,20,000,

advance Rs.20,000 recorded in the books of account.

10th Sep

Advance amount credited in bank account.

2nd Nov

Marriage held in the Community hall.

18th Dec

Invoice issued for Rs.1,20,000 indicating the balance of Rs.1,00,000 payable

22nd Dec

Balance Rs.1,00,000 recorded in the books of account.

24th Dec

Payment Rs.1,00,000 credited to the bank account

Answer

(1) Statutory Provision

(i) Section-13(2)(a) - If invoice is issued within 30 days of supply of service as per section 31, TOS shall be earlier of

date of issue of invoice or

date of receipt of payment

(ii) Section-13(2)(b) - If invoice is not issued within 30 days of supply of service as per section 31, TOS shall be earlier of

date of supply of service, or

date of receipt of payment, or

(2) Facts and Conclusion

Particulars

Rs.20,000

Rs.1,00,000

Date of payment received in books

8th Sep

22nd Dec

Date of payment credited in bank a/c

10th Sep

24th Dec

Date of Provision of services

2nd Nov

2nd Nov

Date of Invoice

18th Dec

18th Dec

Due date of Invoice u/s 31

2nd Dec

2nd Dec

Inv Issued within due date

No

No

(3) Conclusion

Since invoice was not issued within due date as per section 13(2), hence TOS shall be earlier of date of provision of service, or date of receipt of payment.

(a) For Rs.20,000 – 8th Sep

(b) For Rs.1,00,000 – 2nd Nov

 

Question-3A [ICSI-P-J21-O-4c-5]

Ganesh booked a marriage hall for a total rent of Rs.70,000 by paying an advance of Rs.20,000 on 7th June, 2020. The marriage was held on 16th Oct, 2020. The owner of the hall issued an invoice on 28th Nov, 2020 for the total rent of Rs.70,000 by mentioning that Rs.50,000 is due from Ganesh after adjusting the advance. The balance Rs.50,000 was received from Ganesh on 4th Dec, 2020. Determine the time of supply.

 

Question-3B [ICSI-P-D21-O-3d(i)-3]

M’ booked a banquet hall on 5th July, 2020 for an agreed sum of Rs.25,000 and paid an advance of Rs.6,000 on that date. Function held in the banquet hall on 14th Aug, 2020. Thereafter, on 26th Sep, 2020 the owner of convention hall issued invoice for Rs.25,000 indicating balance of Rs.19,000 is payable. ‘M’ paid the balance payment on 2nd Nov, 2020. Determine time of supply in this case under GST Law.

 

Question-3C [ICSI-E-J21-O-80-1]

Determine the time of supply from the following particulars :  

7th May

Booking of banquet hall, sum agreed Rs.25,000

advance of Rs.4,000 received

16th Sep

Function held in banquet hall

28th Oct

Invoice issued for Rs.25,000, indicating balance of Rs.21,000 payable

4th Nov

Balance payment of Rs.21,000 received

(A) The time of supply of service to the extent of advance amount received is 7th May and the time of supply of service to the extent of the balance amount is 16th September

(B) The time of supply is 16th September for the all amount

(C) The time of supply is 28th October

(D) The time of supply is 4th November

 

Question-4 [ICSI-E-D20-69-1] [Partly Advance & Inv issued on or before due date]

An advance of Rs.75,000 was received on 25th Aug, 2019 against the services rendered on 12th Sep, 2019 for the total value of Rs.3,00,000. Invoice was also issued on the same day being 12th Sep, 2019 and the balance payment of Rs.2,25,000 was received on 18th Sep, 2019. The time of supply and the value of supply under CGST Act, 2017 shall be :

(A) 12th Sep, 2019; Rs.3,00,000

(B) 25th Aug, 2019; Rs.3,00,000

(C) 25th Aug, 2019; Rs.75,000 and 12th Sep, 2019; Rs.2,25,000

(D) 18th Sep, 2019; Rs.3,00,000

Answer

(1) Statutory Provision

(i) Section-13(2)(a) - If invoice is issued within 30 days of supply of service as per section 31, TOS shall be earlier of

date of issue of invoice or

date of receipt of payment

(ii) Section-13(2)(b) - If invoice is not issued within 30 days of supply of service as per section 31, TOS shall be earlier of

date of supply of service, or

date of receipt of payment, or

(2) Facts and Conclusion

Particulars

Rs.75,000

Rs.2,25,000

Date of payment received in books

25th Aug

18th Sep

Date of payment credited in bank a/c

NA

NA

Date of Provision of services

12th Sep

12th Sep

Date of Invoice

12th Sep

12th Sep

Due date of Invoice u/s 31

11th Oct

11th Oct

Inv Issued within due date

Yes

Yes

(3) Conclusion

Since invoice was issued within due date as per section 13(2), hence TOS shall be earlier of date of invoice, or date of receipt of payment.

(a) For Rs.75,000 – 25th Aug

(b) For Rs.2,25,000 – 12th Sep

 

Question-5 [ICAI-I-Ch5-12] [Misc Quesiton]

XYZ & Co., a firm of Chartered Accountants, issued invoice for services rendered to Mr. A on 7th Sep. Determine the time of supply in the following independent cases:

(1) The provision of service was completed on 1st Aug and payment was received on 28th Sep.

(2) The provision of service was completed on 14th Aug and payment was received on 28th Sep.

(3) Mr. A made the payment on 3rd Aug. However, provision of service was remaining to be completed at that time.

(4) Mr. A made the payment on 15th Sep. However, provision of service was remaining to be completed at that time

Answer

(1) Statutory Provision

(i) Section-13(2)(a) - If invoice is issued within 30 days of supply of service as per section 31, TOS shall be earlier of

date of issue of invoice or

date of receipt of payment

(ii) Section-13(2)(b) - If invoice is not issued within 30 days of supply of service as per section 31, TOS shall be earlier of

date of supply of service, or

date of receipt of payment, or

(2) Facts and Conclusion

Particulars

1

2

3

4

Date of Provision of services

1st Aug

14th Aug

Not yet Provided

Not yet Provided

Due date of Invoice u/s 31

31st Aug

13th Sep

NA

NA

Date of Invoice

7th Sep

7th Sep

7th Sep

7th Sep

Date of payment received in books

28th Sep

28th Sep

3rd Aug

15th Sep

Date of payment credited in bank a/c

NA

NA

NA

NA

Inv Issued within due date

No

Yes

NA

NA

TOS

1st Aug

7th Sep

3rd Aug

7th Sep

Remark

(1) 1st Aug since the invoice is not issued within 30 days of supply of service.

(2) 7th Sept since the invoice is issued within 30 days of supply of service and the payment is received after the issuance of invoice.  

(3) 3rd Aug viz., earlier of date of issuance of invoice (7th Sep) or date of receipt of payment (3rd Aug)

(4) 7th Sep viz., earlier of date of issuance of invoice (7th Sep) or date of receipt of payment (15th Sep

 

Quesiton-5A [ICAI-I-N18-O-8b-5]

Mr. XYZ & Co., a firm of Chartered Accountants, issued invoice for services rendered to Mr. A on 7th Sep, 2017. Determine the time of supply in the following independent cases:

(1) The provision of service was completed on 1st Aug, 2017. [Ans 01-08-2017]

(2) The provision of service was completed on 14th Aug, 2017. [Ans 07-09-2017]

(3) Mr. A made the payment on 3rd Aug, 2017 where provision of service was remaining to be completed. [Ans 03-08-2017]

(4) Mr. A made the payment on 15th Sep, 2017 where provision of service was remaining to be completed. [Ans 07-09-2017]

 

Question-5B [ICSI-P-D20-3b-4]

Determine the time of supply (TOS) by giving reason in brief in each of the following cases in accordance with the provisions in CGST Act, 2017:

No

Date of completion of service

Date of Invoice

Date of receipts of payment

1

16-07-2019

21-07-2019

26-08-2019

2

16-08-2019

11-10-2019

01.10.2019

3

16.10.2019

11.10.2019

Part payment on 01.10.2019

Remaining payment on 26.10.2019

4

16.10.2019

11.11.2019

Part payment on 12.11.2019

Remaining payment on 15.11.2019

 

Question-6 [ICAI-I-Ch5-Ill-6] [Clause c]

Investigation shows that ABC & Co carried out service of cleaning and repairs of tanks in an apartment complex, for which the Apartment Owners’ Association showed a payment in cash on 4th April to them against work of this description. The dates of the work are not clear from the records of ABC & Co. ABC & Co have not issued invoice or entered the payment in their books of account.

Answer

The time of supply cannot be determined vide the provisions of clauses 13(2)(a) and (b) as neither the invoice has been issued nor the date of provision of service is available as also the date of receipt of payment in the books of the supplier is also not available. Therefore, the time of supply will be determined vide clause 13(2)(c) i.e., the date on which the recipient of service shows receipt of the service in his books of account.

Thus, time of supply will be 4th April, the date on which the Apartment Owners’ Association records the receipt of service in its books of account.

 

Question-7 [ICAI-F-Ch6-5] [Construction contract] [Continuous supply of Services]

Renudhoot Ltd. enters into a contract with XYZ Ltd. on 2nd July 2020 for a period of 2 years for construction of a new building - to be used for commercial purposes - for a total consideration of Rs.150 lakh. As per the terms of contract, Renduhoot Ltd. is required to make payment at different stages of completion of the building namely, 50%, 75% and 100%.

Determine the time of supply using relevant details given as under:

Stage

Date of various stage

Date of Inv

Date of Payment

Amt Paid (Rs.)

Initial booking

02-07-2020

02-07-2020

02-07-2020

15 lacs

50% completion of building

15-03-2021

22-03-2021

29-03-2021

60 lacs

75% completion of building

20-06-2021

24-07-2021

23-07-2021

35 lacs

100% completion of building

30-09-2021

30-09-2021

20-09-2021

40 lacs

Answer

(1) Statutory Provision

(i) Section-13(2)(a) - If invoice is issued within period prescribed u/s 31, TOS shall be earlier of

date of issue of invoice or

date of receipt of payment

(ii) Section-13(2)(b) - If invoice is not issued within period prescribed u/s 31, TOS shall be earlier of

date of supply of service, or

date of receipt of payment, or

(iii) Section 31(5)(c) –in case of continuous supply of services, the invoice should be issued either (i) on/ before the due date of payment or (ii) before/ at the time when the supplier of service receives the payment, if the due date of payment is not known (iii) on/ before the date of completion of the milestone event when the payment is linked to completion of an event.

Stage

Date of stage

Date of Inv

Date of Payment

Conclusion

Initial booking

02-07-2020

02-07-2020

02-07-2020

Invoice is issued within due date,

hence TOS shall be earlier of the date of issue of invoice or date receipt of payment.

Time of supply is 02.07.2020.

50% completion

15-03-2021

22-03-2021

29-03-2021

Invoice is not issued within due date,

hence TOS shall be earlier of the date of provision of services or date receipt of payment.

Time of supply is 15.03.2021.

75% completion

20-06-2021

24-07-2021

23-07-2021

Invoice is not issued within due date,

hence TOS shall be earlier of the date of provision of services or date receipt of payment.

Time of supply is 20.06.2021.

100% completion

30-09-2021

30-09-2021

20-09-2021

Invoice is issued within due date,

hence TOS shall be earlier of the date of issue of invoice or date receipt of payment.

Time of supply is 30.09.2021.

 

13.3 Time of supply of service in case of Reverse Charge

Question No.

Institute

Level

Term

QN

M

T-1

ICSI

P

D19-O

4c(i)

3

Question-1

ICSI

E

J21

62

1

Question-2

ICAI

I

Ch5

4

NA

Question-3

ICAI

I

M18-O

9a

3

Question-3A

ICAI

I

Ch5

Ill-7

NA

Question-3B

ICAI

I

Ch5

10

NA

Question-3C

ICSI

P

D22

2A(i)

5

Question-4

ICAI

I

Ch5

5

NA

Question-5

ICAI

I

N19-O

7b

4

Repeated

ICAI

I

Ch5

13

NA

Question-6

ICAI

I

N19

6b

4

Question-7

ICSI

P

D19-O

4c(ii)

2

Question-7A

ICAI

F

Ch6

6

NA

 

[T-1] [ICSI-P-D19-O-4c(i)-3]

Explain the relevant provision of Section 13(3) of the CGST, Act 2017 regarding determination of time of supply of service under reverse charge basis.

 

Quesiton-1 [ICSI-E-J21-62-1]

What is the time of supply of service under reverse charge mechanism?

(A) 60 days from the date of service

(B) 90 days from the date of service

(C) 60 days from the date of invoice and date of payment – whichever is earlier

(D) 90 days from the date of service and date of payment – whichever is earlier

 

Quesiton-2 [ICAI-I-Ch5-4]

Determine the time of supply in the following cases assuming that GST is payable under reverse charge:

Case

Inv Date

Payment date in Books

Debit Date in bank

61st Date from Inv Date

TOS

1

Jun 29

Aug 10

 

29 Aug

Aug 10

2

Jun 1

Aug 10

 

1 Aug

1 Aug

3

Jun 29

Part payment made on June 30 and
balance amount paid on Sep 1

 

29 Aug

Jun 30 and 29 Aug

4

Jun 1

Jun 28

Jun 30

1 Aug

Jun 28

5

Jun 29

Jun 30

Jun 26

29 Aug

Jun 26

 

Question-3 [ICAI-I-M18-O-9a-3]

On 4th Sep, 2017, V.R. Mehman a famous music composer, received Rs.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, 2017 & raised the invoice on 24th July, 2017. What will be the time of supply as per CGST Act, 2017?

Note: Above service is taxable under reverse charge basis.

Answer

(1) Statutory Provision

(i) Section 13(3) - In case of supplies taxable on RCM basis, time of supply shall be the earlier of:–

(a) date of payment as entered in the books of recipient or debit date of payment in his bank account; or

(b) date immediately following 60 days from date of invoice or any other document

(2) Facts

(i) Date of payment by recipient – 4th Sep, 2017

(ii) 61 days from invoice date = 24th Jul + 61 = 23rd Sep, 2017

(3) Conclusion

TOS shall be earlier of above = 4th Sep, 2017

 

Question-3A [ICAI-I-Ch5-Ill-7]

Determine the time of supply from the given information. (Assume that service being supplied is taxable under reverse charge)

4th May - The supplier of service issues invoice for service provided. There is a dispute about amount payable, and payment is delayed.

21st Aug - Payment made to the supplier of service

Answer

(1) Statutory Provision

(i) Section 13(3) - In case of supplies taxable on RCM basis, time of supply shall be the earlier of:–

(a) date of payment as entered in the books of recipient or debit date of payment in his bank account; or

(b) date immediately following 60 days from date of invoice or any other document

(2) Facts

(i) Date of payment by recipient – 21st Aug

(ii) 61 days from invoice date = 4th May + 61 = 4th Jul

(3) Conclusion

TOS shall be earlier of above = 4th Jul

 

Question-3B [ICAI-I-Ch5-10]

A firm of advocates issues invoice for services to ABC Ltd. on 17th Feb. The payment is contested by ABC Ltd. on the ground that on account of negligence of the firm, the company’s case was dismissed by the Court for non-appearance, which necessitated further appearance for which the firm is billing the company. The dispute drags on and finally payment is made on 3rd Nov. Identify the time of supply of the legal services.

Answer

(1) Statutory Provision

(i) Section 13(3) - In case of supplies taxable on RCM basis, time of supply shall be the earlier of:–

(a) date of payment as entered in the books of recipient or debit date of payment in his bank account; or

(b) date immediately following 60 days from date of invoice or any other document

(2) Facts

(i) Date of payment by recipient – 3rd Nov

(ii) 61 days from invoice date = 17th Feb + 60 = 19th Apr

(3) Conclusion

TOS shall be earlier of above = 19th Apr

 

Question-3C [ICSI-P-D22-2A(i)-5]

Determine the time of supply under CGST Act, 2017 by giving reason in brief in the following independent cases assuming that GST is payable under RCM

SN

Date of payment by recipient for supply of service

Date of issue of invoice by supplier of service

(i)

August 11, 2021

June 29, 2021

(ii)

August 11, 2021

June 1, 2021

(iii)

Part payment made on June 30, 2021 and balance amount paid on September 1, 2021

June 29, 2021

(iv)

Payment is entered in the books of account of recipient on June 28, 2021 and debited in recipient bank account on June 30, 2021

June 1, 2021

(v)

Payment is entered in the books of account of recipient on June 30, 2021 and debited in recipient bank account on June 26, 2021

June 29, 2021

Answer

(1) Statutory Provision

Section 13(3) - In case of supplies taxable on RCM basis, time of supply shall be the earlier of:–

(a) date of payment as entered in the books of recipient or debit date of payment in his bank account; or

(b) date immediately following 60 days from date of invoice or any other document

 

SN

Date of payment by recipient

Inv Date

61 days  from Inv Date

TOS

(i)

August 11, 2021

June 29, 2021

29-08-2021

11-08-2021

(ii)

August 11, 2021

June 1, 2021

01-08-2021

01-08-2021

(iii)

Part payment on June 30, 2021 and balance paid on Sep 1, 2021

June 29, 2021

29-08-2021

30-06-2021 and 29-08-2021

(iv)

Payment is entered in the books of recipient on June 28, 2021 and debited in recipient bank on June 30, 2021

June 1, 2021

01-08-2021

28-06-2021

(v)

Payment is entered in the books of recipient on June 30, 2021 and debited in recipient bank account on June 26, 2021

June 29, 2021

29-08-2021

26-06-2021

 

Question-4 [ICAI-I-Ch5-5] [Delay in service]

Kabira Industries Ltd engaged the services of a transporter for road transport of a consignment on 17th June and made advance payment for the transport on the same date, i.e. 17th June. However, the consignment could not be sent immediately on account of a strike in the factory, and instead was sent on 20th July. Invoice was received from the transporter on 22nd July. What is the time of supply of the transporter’s service?

Answer

(1) Statutory Provision

(i) Section 13(3) - In case of supplies taxable on RCM basis, time of supply shall be the earlier of:–

(a) date of payment as entered in the books of recipient or debit date of payment in his bank account; or

(b) date immediately following 60 days from date of invoice or any other document

(2) Facts

(i) Date of payment by recipient – 17th June

(ii) 61 days from invoice date = 22nd Jul + 60 = 20th Aug

(3) Conclusion

TOS shall be earlier of above = 17th Jun

 

Question-5 [ICAI-I-Ch5-13] [ICAI-I-N19-O-7b-4] [Determination of RCM supply]

M/s Pranav Associates, a partnership firm, provided recovery agent services to Newtron Credits Ltd., a non-banking financial company and a registered supplier, on 15th Jan. Invoice for the same was issued on 7th Feb and the payment was made on 18th April by Newtron Credits Ltd. Bank account of the company was debited on 20th April.

Determine the following: (i) Person liable to pay GST (ii) Time of supply of service

Answer

(1) Statutory Provision

(i) Tax on services supplied by a recovery agent to, inter alia, a non-banking financial company (NBFC) is payable under RCM by such NBFC. Therefore, in the given case, person liable to pay GST is the NBFC - Newton Credits Ltd.

(ii) Section 13(3) - In case of supplies taxable on RCM basis, time of supply shall be the earlier of:–

(a) date of payment as entered in the books of recipient or debit date of payment in his bank account; or

(b) date immediately following 60 days from date of invoice or any other document

(2) Facts

(i) Date of payment by recipient – 18th April/ 20th April

(ii) 61 days from invoice date = 7th Feb + 61 = 9th Apr

(3) Conclusion

TOS shall be earlier of above = 9th Apr

 

Question-6 [ICAI-I-N19-6b-4] [Determination of RCM supply and Partly Advance]

Know & Grow publishers, a registered dealer in India, paid and advance Rs.50,000 to Mr. Ganatra, an author, for the copyright covered u/s 13(1)(a) of the Copyright Act, 1957, of his original literary work on 5-9-2018. It made the balance payment Rs.1,50,000 on 12-12-2018. You are required to determine the time of supply, if Mr. Ganatra raised the invoice on:

(i) 6-10-2018, or (ii) 17-12-2018.

Answer

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(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. Know & Grow Publishers.

(1) Statutory Provision

Section 13(3) - In case of supplies taxable on RCM basis, time of supply shall be the earlier of:–

(a) date of payment as entered in the books of recipient or debit date of payment in his bank account; or

(b) date immediately following 60 days from date of invoice or any other document

(2) Facts and Conclusion

Date of payment received in books

05-09-2018

12-12-2018

05-09-2018

12-12-2018

Date of Invoice

06-10-2018

06-10-2018

17-12-2018

17-12-2018

61 days from Date of Invoice

06-12-2018

06-12-2018

16-02-2019

16-02-2019

TOS earlier of above

05-09-2018

06-12-2018

05-09-2018

12-12-2018

Assuming invoice was issued within due date.

 

Question-7 [ICSI-P-D19-O-4c(ii)-2] [RCM on Import of services]

Ganesh, a registered person, has received the supply of services from non-taxable territory. Accordingly the tax is liable to be paid by the recipient on reverse charge basis. Ganesh provides the following information in respect of such service received by him :

Transaction/Event Date

1

Date of payment as entered in the books by service receiver (Ganesh)

10-12-2018

2

Date on which above payment is debited in Bank account of Ganesh

17-12-2018

3

Date on of issue of invoice by supplier of service

20-11-2018

You are required to :

(i) Explain the relevant provision of Section 13(3) of the CGST, Act 2017 regarding determination of time of supply of service under reverse charge basis.

(ii) Determine the time of supply in respect of service received by Ganesh.

Answer

(i) Relevant Provision of Section 13(3)

In case of supplies taxable on RCM basis, time of supply shall be the earlier of:–

(a) date of payment as entered in the books of recipient or debit date of payment in his bank account; or

(b) date immediately following 60 days from date of invoice or any other document

 

1st Proviso - where it is not possible to determine the time of supply under clause (a) or (b), time of supply shall be the date of entry in the books of account of the recipient of supply:

(2) Facts

(i) Date of payment by recipient – 10-12-2018/ 17-12-2018

(ii) 61 days from invoice date = 20-11-2018 + 61 = 20-01-2019

(3) Conclusion

TOS shall be earlier of above = 10-12-2018

 

Question-7A [ICAI-F-Ch6-6]

Mint Industries Ltd., a registered supplier, imports business support services from Green Inc. of USA on 13th Aug. The relevant invoice for $ 1,20,000 is raised by Green Inc on 18th Aug. Mint Industries Ltd. makes the payment against the said invoice as follows:

Case I

22nd Sep

Case II

27th Sep

Determine time of supply in each of the aforesaid cases.

Answer

In case of services supplied by any person located in a non-taxable territory to any person other than non-taxable online recipient, tax is payable under reverse charge by the person located in the taxable territory. [Notification No. 10/2017 IT (R) dated 28.06.2017]. Hence, in the given case, since the business support services are provided by Green Inc (located in non-taxable territory) to Mint Ltd. (person other than non-taxable online recipient and located in taxable territory), tax is payable under reverse charge by Mint Ltd.

The time of supply of services taxable under reverse charge is the earlier of
the following:

Date of payment, or

Date immediately following 60 days since issue of invoice (or any other document in lieu of invoice) by the supplier.

If it is not possible to determine the time of supply by using these parameters, then the time of supply will be the date of entry of the service in the books of account of the recipient of supply.  In view of the aforesaid provisions, the time of supply in each of the given cases will be as under:

Case-I Since Mint Ltd makes the payment within 60 days of the date of issue of invoice, the time of supply is the date of payment, i.e. 22nd Sep.

Case-II As Mint Ltd. makes the payment after 60 days from the date of invoice, time of supply is the date immediately following the said period of 60 days, i.e. 61st day which is 18th Oct.

 

13.3.1 Time of supply in case of import of services between associated enterprises

Question No.

Institute

Level

Term

QN

M

Question-1

ICAI

I

Ch5

Ill-8

NA

Question-2

ICAI

F

Ch6

7

NA

 

Question-1 [ICAI-I-Ch5-Ill-8]

Determine the time of supply from the given information.

4th May -  A German company issues email informing its associated company ABC Ltd. of the cost of technical services provided to it.

2nd - Jul ABC Ltd transfers the amount to the account of the German company

Answer

(1) Statutory Provision

2nd Proviso to Section 13(3) - In case of supply by associated enterprises, where the supplier of service is located outside India, time of supply shall be earlier of

date of entry in the books of account of the recipient of supply or

date of payment, whichever is earlier.

Advice

As there is no prior entry of the amount in the books of account of ABC Ltd., July 2 will be the time of supply, being the date of payment.

 

Question-2 [ICAI-F-Ch6-7]

Kothari Ltd., Mumbai, holds 51% of shares of Wilson Inc., a USA based company. Wilson Inc. provides business auxiliary services to Kothari Ltd. From the following details, determine the time of supply of service provided by Wilson Inc:

Agreed Consideration

US $1,00,000

Date on which services are provided by Wilson Inc.

16th June

Date on which invoice is issued by Wilson Inc.

19th Aug

Date of debit in the books of account of Kothari Ltd.

30th Sep

Date on which payment is made by Kothari Ltd

23rd Sep

Answer

Since Kothari Ltd. holds 51% shares of Wilson Inc., Kothari Ltd. and Wilson Inc. are ‘associated enterprises’ as per section 92A of the Income-tax Act, 1961.

As per second proviso to section 13(3), in case of supply by associated enterprises, where the supplier of service is located outside India, the time of supply is the earlier of the following two dates:

Date of entry in the books of account of the recipient of supply [which is Kothari Ltd. in the present case] OR

30th Sep

Date of payment [by Kothari Ltd. in the present case]

23rd Sep

Thus, time of supply is 30th Sep.

 

13.7 Misc Questions

Question No.

Institute

Level

Term

QN

M

Question-1

ICSI

P

J22

2a

4

Question-2

ICAI

F

J21

3a

5

Question-3

ICAI

F

Ch6

9

NA

 

Quesiton-1 [ICSI-P-J22-2a-5]

Determine the time of supply (TOS) by giving reason in brief in each of the following cases in accordance with the provisions of CGST Act, 2017:

(i) Sunshine Pvt. Ltd. engaged in supply of services. It receives advance of Rs.2,35,000 from clients on 14th May, 2021 for the service to be rendered in the month of June, 2021.

(ii) Deep Ltd. provided management consultancy services to M/s. PBS & Co. on 14th Aug, 2021 and billed it for Rs.1,60,000 on 19th Sep, 2021. It received the payment for the same on 23rd Sep, 2021.

(iii) A provided the professional services to B Ltd. on 16th July, 2021 and date of raising invoice was 11th Aug, 202l, he received part payment 50% on 1st Aug, 2021 and Remaining 50% payment on 26th Aug, 2021.

(iv) Ankit Kumar purchased some goods covered under reverse charge mechanism. The goods received on 19th June, 202l, Date of invoice is l4th May, 2021 and the payment is made on 22nd June, 2021.

(v) TPS Ltd. is an Indian Company. It has received taxable supply of services from its associated enterprises Alfa Ltd. an US based company on 1st Jan, 2022. Alfa Ltd. raised an invoice of $ 80,000 on 10th February, 2022. TPS Ltd. debited its books of account on 25th February, 2022 and made the payment on 25th, March, 2022.

Answer

Statutory Provision

(a) Section-13(2)(a) - If invoice is issued within 30 days of supply of service as per section 31, TOS shall be earlier of

date of issue of invoice or

date of receipt of payment

(b) Section-13(2)(b) - If invoice is not issued within 30 days of supply of service as per section 31, TOS shall be earlier of

date of supply of service, or

date of receipt of payment, or

 

(i) Advice

Date of receipts of payment = 14th May, 2021

Date of service rendered = June, 2021.

In the given, date of issue of invoice is not given, hence as per section 13(2)(b), time of supply shall be earlier of date of receipts of payment or date of supply of services i.e. 14th May 2021

 

(ii) Advice

Date of receipts of payment = 23rd Sep, 2021

Date of service rendered = 14th Aug, 2021

Due date of invoice = 14th Sep, 2021

Date of invoice = 19th Sep, 2021

In the given, invoice issued after due date, hence as per section 13(2)(b), time of supply shall be earlier of date of receipts of payment or date of supply of services i.e. 14th Aug 2021

 

(iii) Advice

Date of receipts of payment = 1st Aug and 26th Aug, 2021

Date of service rendered = 16th Jul, 2021

Due date of invoice = 15th Aug, 2021

Date of invoice = 11th Aug, 2021

In the given, invoice issued within due date, hence as per section 13(2)(a), time of supply shall be earlier of date of receipts of payment or date of invoice i.e. 1st Aug and 11th Aug

 

(iv)

(1) Section 12(3) - In case of supplies on which tax is payable on RCM basis, time of supply shall be the earliest of following dates

(a) date of the receipt of goods; or

(b) date of payment as entered in the books of account of the recipient or

debit date of payment in his bank account; or

(c) date immediately following 30 days from the date of invoice or any other document:

(2) Advice

Goods receipts date = 19th Jun, 2021

Inv date = 14th May, 2021

Date of payment = 22nd Jun, 2021

Since the earliest date is 14th May, hence time of supply is 01th May.

 

(v)

(1) 2nd Proviso to Section 13(3) - in case of supply by associated enterprises, where the supplier of service is located outside India, time of supply shall be earlier of

date of entry in the books of account of the recipient of supply or

date of payment, whichever is earlier.

 

(2) Advice

In the given case, TPS Ltd. an Indian Company is an associated enterprises of Alfa Ltd. an US based company

Date of receipts of service = 01-01-2022

Date of entry in books = 25-02-2022

Date of payment = 25-03-2022

As per section 2nd proviso to section 13(3), time of supply shall be 01-01-2022

 

Question-2 [ICAI-F-J21-3a-5] [Time of supply of goods and services]

SRK Limited, registered under GST, is engaged in sale of fabrics as well as doing job work of knitting of yarn for garment manufacturers. The company provides the following information in respect of order received for both sale of fabrics and job work

Event

Supply of fabrics

Job work of knitting

Date of confirmation of order

01-08-2020

10-09-2020

Date of receipt of advance of Rs.1,00,000 each

05-08-2020

12-09-2020

Date of removal of goods on completion of order

10-08-2020

15-09-2020

Date of issue of invoice for full amount

15-08-2020

20-09-2020

Date of receipt of balance payment of Rs.50,000 each

25-08-2020

25-09-2020

Determine the time of supply for the purpose of payment of tax under CGST Act, 2017, in respect of the above orders executed by the company.

Answer

(i) Section 12(2) read with Notification No. 66/2017-Central Tax dt. 15-11-2017 - Yime of supply of goods shall be the earlier of

The date of issue of invoice by the supplier or

the last date on which he is required u/s 31 to issue the invoice for such supply

(ii) Section-13(2)(a) - If invoice is issued within period prescribed u/s 31, TOS shall be earlier of

date of issue of invoice or

date of receipt of payment

(iii) Section-13(2)(b) - If invoice is not issued within period prescribed u/s 31, TOS shall be earlier of

date of supply of service, or

date of receipt of payment, or

Determination of time of supply

Event

Supply of fabrics

Job work

 

Rs.1,00,000

Rs.50,000

Rs.1,00,000

Rs.50,000

Date of receipt

05-08-2020

25-08-2020

12-09-2020

25-08-2020

Date of removal of goods

10-08-2020

10-08-2020

15-09-2020

15-09-2020

Date of issue of invoice

15-08-2020

15-08-2020

20-09-2020

20-09-2020

Due date of Issue of Inv

10-08-2020

10-08-2020

14-09-2020

14-09-2020

Inv issued after due date

Yes

Yes

Yes

Yes

Time of supply of goods

[earlier of date of inv or due date of inv]

10-08-2020

10-08-2020

 

 

Time of supply of service

[earlier of date of service or date of payment]

 

 

12-09-2020

15-09-2020

 

Question-3 [ICAI-F-Ch6-8]

KLM Ltd., a publishing and printing house registered in Maharashtra, is engaged in supply of books, letter cards, envelopes, guides and reference materials. The following information is provided by the company

Event

Printing of books

Printing of envelops

Date of entering into printing contract

16th Mar

20th Mar

Date of receipt of advance

20th Mar

25th Mar

Date of completion of printing

10th Apr

5th Apr

Date of issue of invoice

15th May

10th Apr

Date of removal of books and letter heads to
buyer

13th May

7th Apr

Date of receipt of balance payment

31st May

30th Apr

In respect of printing of books, content was supplied by the author. For printing of envelopes, the design and logo were supplied by the buyer.

Determine the time of suppl(ies) for the purpose of payment of tax.

GST Gyaan | https://gstgyaan.in | CA Rajesh Ritolia - 9350171263

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