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