Author: abhishek

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What will be the time of supply in case of continuous supply of goods

In terms of Section 2(32) of the CGST Act, 2017, ‘continuous supply of goods’ means a supply of goods which is provided, or agreed to be provided, continuously or on recurrent basis, under a contract, whether or not by means of a wire, cable, pipeline or other conduit, and for which the supplier invoices the recipient on a regular or periodic basis and includes supply of such goods as the Government may, subject to such conditions, as it may, by notification, specify. Due date for issuance of invoice in terms of Section 31(4) involving successive statement of accounts (SOA) or successive payments is:
 Before/ at the time of issue of each SOA or
 Before/ at the time of receipt such successive payment
Accordingly, the time of continuous supply of goods, in terms of Section 12 shall be the earliest of the following:
(a) Date of issue of invoice; or
(b) Due date of issue of invoice; or
(c) Date on which payment is entered in books of accounts of the supplier; or
(d) Date on which payment is credited to the bank account.

(ICAI FAQ PUBLICATIONS 06-09-2017 TIME FOR SUPPLY OF GOODS: FAQ NO. 11)

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What would be the time of supply where composite supply involves supply of goods as principal supply

The general provisions relating to time of supply of goods will be applicable where composite supply involves goods as principal supply. Accordingly, the time of supply of such composite supply shall be the earliest of the following:
(a) Date of issue of invoice; or
(b) Due date of issue of invoice; or
(c) Date on which payment is entered in books of accounts of the supplier; or
(d) Date on which payment is credited to the bank account of the supplier.

(ICAI FAQ PUBLICATIONS 06-09-2017 TIME FOR SUPPLY OF GOODS: FAQ NO.10)

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State whether, Composite supply will attract the provisions pertaining to time of supply of goods or services

In terms of Section 2(30) of the CGST Act, 2017 ‘composite supply’ is defined to mean a supply made by a taxable person to a recipient comprising two or more taxable supplies of goods or services, or both, or any combination thereof, which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply. The illustration appended to the definition of ‘composite supply’ reads as follows:
Where goods are packed and transported with insurance, the supply of goods, packing materials, transport and insurance is a composite supply and supply of goods is the principal supply.
Section 8(a) provides that the composite supply whether involves supply of goods or services shall be decided based on the principal supply forming part of ‘composite supply’. In other words, if the composite supply involves supply of services as principal supply, such composite supply would qualify as supply of services and accordingly the provisions relating to time of supply of services would be applicable. Alternatively, if composite supply involves supply of goods as principal supply, such composite supply would qualify as supply of goods and accordingly, the provisions relating to time of supply of goods would be applicable.

(ICAI FAQ PUBLICATIONS 06-09-2017 TIME FOR SUPPLY OF GOODS: FAQ NO. 9)

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What is time of supply with respect to amount received in excess of the invoice amount (e.g.: Invoice is issued for ` 5,000 on August 22, 2017 by the supplier. Subsequently, the recipient pays- scenario 1: ` 5,500/- and scenario 2: ` 8,000/-)

In terms of the proviso to Section 12(2) (b) of the CGST Act, 2017, the time of supply with respect to the amount received in excess up to ` 1,000/- of the amount indicated in tax invoice, shall at the option of the supplier, be the date of issue of invoice, in respect of such excess amount. Thus, if the supplier opts for this method, the time of supply will be the date when the supplier raises invoice in respect of the excess amount. Where the excess amount is received exceeds ` 1,000/-, the time of supply of goods shall be the date of receipt i.e., earliest of the following:
(a) Date on which payment is entered in books of accounts of the supplier; or
(b) Date on which payment is credited to the bank account.
Accordingly, the time of supply in each of the scenarios given in the example would be as follows:
Scenario 1: The time of supply of goods with respect to the amount of ` 500/- received
in excess shall be the date of invoice whenever raised by the supplier in respect of the excess amount.
Scenario 2: The time of supply would be as follows:

Date on which payment is entered in books of accounts of the supplier August 30, 2017 Time of supply shall be August 28,2017
Date on which payment is credited to the  bank account August 28, 2017

(ICAI FAQ PUBLICATIONS 06-09-2017 TIME FOR SUPPLY OF GOODS : FAQ NO. 8)

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What will be the time of supply in case of supply of vouchers

In terms of Section 12(4) of the CGST Act, 2017, time of supply of vouchers shall be the earliest of the following:
(a) date of issue of voucher, if the supply is identifiable at that point; or
(b) date of redemption of voucher, in all other cases. Eg: Mr. A buys vouchers from Lifestyle of worth ` 1,000/- for a shirt dated August 01, 2017. Mr. A gifts such vouchers to Mr. B who redeems such vouchers with Amazon India on August 31, 2018. – Time of supply is the date of issue of vouchers viz., August 01, 2017.

(ICAI FAQ PUBLICATIONS 06-09-2017 TIME FOR SUPPLY OF GOODS: FAQ NO. 7)

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How can tax paid be recouped and adjusted in case of return of goods attracting reverse charge?

There is no provision in section 34 of the CGST Act or Rule 52 of the CGST
Rules, 2017 regarding reversal of tax paid. Equity demands that relief be allowed to the recipient who has paid the tax so that the recipient may apply for refund under section 54 of the CGST Act and not issue credit note or revised invoice for which there is no provision. This relief to claim refund will be subject to credit not being availed by the recipient on the tax so paid.

(ICAI FAQ PUBLICATION 06-09-2017 : Levy and collection of tax- FAQ NO. 29)

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What will be the time of supply where tax is liable to be paid on goods under reverse charge mechanism

In case of tax liable to be paid on goods under reverse charge mechanism, the time of
supply shall be the earliest of the following:
(a) Date of receipt of goods by the recipient; or
(b) Date on which the payment is entered in the books of accounts of the recipient;
or
(c) Date on which payment is debited in the bank account of the recipient; or
(d) Date immediately following 30 days from the date of issue of invoice or any other
document, by whatever name called, in lieu thereof by the supplier.
Where the time of supply cannot be ascertained as above, the date of entry in the
books of accounts of the recipient shall be the time of supply of goods.
To illustrate, Mr. A being registered taxable person procures goods from Mr. B who is
unregistered. The chronology of events are as follows:

Date of receipt of goods by Mr. A August 16, 2017 Time of supply shall be August 16, 2017
Date on which the payment is entered in the books of accounts of Mr. A August 20, 2017
Date on which payment is debited in the bank account of Mr. A August 22, 2017

In the event, the above details are not available and the date of entry relating to purchase of goods in the books of Mr. A is August 30, 2017, the time of supply of goods will be August 30, 2017.

(ICAI FAQ PUBLICATIONS 06-09-2017 TIME FOR SUPPLY OF GOODS : FAQ NO. 6)