Author: abhishek

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Is reverse charge applicable on awarding contract or issuing Purchase Order (PO)?

Reverse charge is applicable only when there is a supply. Supply ‘agreed to be made’ is regarded as a supply only in case of supply under section 7(1)(a) and 7(1)(c). Even though actual supply is yet to take place, in the case of supplies covered by these two provisions, tax would be payable on award of contract or issue of PO because this itself amounts to supply. However, Table 4 of GSTR-2 requires reference to be made to invoice in respect of supplies liable to reverse charge but Rule 52 does not provide for issuance of invoice earlier than the time of payment. As such the absence of machinery provisions to pay tax at the time of contract / PO, it appears that the liability fails.

(ICAI FAQ PUBLICATION 06-09-2017 : Levy and collection of tax- FAQ NO. 28)

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Is reverse charge applicable after supply or on payment of advance?

Reverse charge is applicable when there is a supply and the time of supply is
determined by section 12 or 13 of the CGST Act. Reverse charge is applicable at the time of advance even though actual supply is yet to take place. Rule 52 provides for the issuance of a Payment Voucher in cases where tax is to be paid on reverse charge basis

(ICAI FAQ PUBLICATION 06-09-2017 : Levy and collection of tax- FAQ NO. 27)

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Does tax liability u/s 9(5) come within reverse charge?

No, definition of reverse charge given in section 2(98) refers only to section 9(3) and section 9(4). Tax payment by e commerce operator in case of specified services under section 9(5) would not be a case of reverse charge but a new specie because the e commerce operator facilitates the supply through the digital network and collects payment from recipient and passes it on to supplier.

(ICAI FAQ PUBLICATION 06-09-2017 :Levy and collection of tax- FAQ NO. 26)

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What would be the ‘due date of issuance of invoice’ with reference to the provisions relating to time of supply of goods

Section 31(1) of the CGST Act, 2017 prescribes the time at which the tax invoice should be issued by a registered taxable person supplying goods. Accordingly, the due date for issuance of invoice would be as follows:
(a) Supply involves movement of goods – It is provided that the tax invoice should be issued before or at the time of removal of goods for supply to the recipient. As such, it is inferred that the date of removal of goods shall be the ‘due date of issuance of invoice’, unless invoice is actually issued before such date.
(b) Any other case – before or at the time of delivery of goods or making goods
available to the recipient. As such, it is inferred that the date on which goods are delivered to the recipient or the date on which goods are made available to the recipient is the ‘due date of issuance of invoice’ , unless invoice is actually issued before such date.                                                                                                             Proviso to Section 31(1) of the CGST Act, 2017 also empowers the Government by way of notification, to specify the categories of goods or supplies in respect of which a tax invoice shall be issued, within such time and in such manner as may be prescribed .

(ICAI FAQ PUBLICATION 06-09-2017 TIME OF SUPPLY OF GOODS: FAQ NO. 3)

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What will be the time of supply of goods, generally

Generally, in terms of Section 12 of the CGST Act, 2017, the time of supply of goods 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 OF SUPPLY OF GOODS : FAQ NO 2)

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How are the provisions relating to ‘time of supply’ relevant under GST Law

The provisions relating to time of supply of goods / services are relevant in ascertaining the time to remit the taxes on a particular transaction involving supply of goods / services under the GST Law. The CGST Act, 2017 provides separate provisions for time of supply of goods and services viz., Section 12 for time of supply of goods and Section 13 for time of supply of services.

(ICAI FAQ PUBLICATION 06-09-2017 TIME OF SUPPLY OF GOODS: FAQ NO. 1)

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What does ‘goods of seed quality’ mean

Seeds are those parts of the plant that can germinate without debris, without infections and give rise to another plant of same species & sold ultimately to farmers. The seeds are often consumed. In order to differentiate between grain that is not suitable for germination or not intended for germination, exemption entries qualify the grain with the words ‘of seed quality’.

(ICAI FAQ PUBLICATION 06-09-2017 EXEMPTION ON SUPPLY OF GOODS : FAQ NO. 25)