Time & value of supply (12-15)

Chapter
IV: Time & value of supply

12 & 13

Liability
to pay tax on supplies shall arise at the time of supply. It is determined as follows:

Item

Time of supply is earliest of the following dates:

12(2):
Goods on which tax is paid other than on reverse charge

►    Date of issue of invoice, if
issued

►    Last date for issue of invoice u/s 31

►    Date of receipt of payment

12(3):
Goods on which tax is paid on reverse charge

►    Date of the receipt of goods

►    Date of receipt of payment

►    Date immediately following 30 days from date of issue of invoice

13(2):
Services on which tax is paid other than on reverse charge

►    Date of issue of invoice if within last date u/s 31 & if not, then date of provision of service

►    Date of receipt of payment

13(3):
Services on which tax is paid on reverse charge

►    Date of receipt of payment

►    Date immediately following 60 days from date of issue of invoice, where invoice is issued by the supplier

►    Date of issue of invoice, where invoice is issued by the recipient

► 
In the
case of goods on which tax is paid on reverse charge and in the case of
services, if it is not possible to
determine the time of supply based on the events stated above, then date of entry in books of account of the recipient is the time of supply.

► 
If it is still not possible to determine the time of supply, then if periodical return is
to be filed, date
of filing and if not filed, then date of payment of tax is the
time of supply [12(5) /13(5)].

► 
Date of receipt of
payment shall be earlier
of the dates on which the payment is, entered in books of account & credited to bank account.

► 
If the
supplier receives an amount up to Rs. 1000 in excess of invoice amount, the time of supply for such
excess shall, at the option of the supplier, be the date of issue of invoice.

► 
To the
extent of addition in the value by way of interest, late fee or penalty for
delayed payment of any consideration, the time of supply shall be date of
receipt of such addition.

14

Section
12 & 13 are not applicable where there is a change in the
rate of tax and any one of the
following dates is after the change in rate of tax:

►   
Date of
supply of goods/services

►   
Date of
issue of invoice

►   
Date of
receipt of payment

In
such cases the time of supply is as follows:

Condition

Time of supply

Date
of supply
of goods/services is after change in the rate of tax and either invoice or payment is after the change

Date
of receipt of payment or date of issue of invoice whichever
is later

All
other cases

Date
of receipt of payment or date of issue of invoice whichever
is earlier

Date
of receipt of payment shall be earlier of the dates on which the payment is,
entered in his books of account & credited to his bank account. However
it shall be the date of credit in the bank account if such credit is after 4
working days from the date of change in rate of tax.

15

The
value of supply shall be the transaction value, which is the price actually
paid or payable where the supplier & the recipient are not related. Price
includes:

►   
Any taxes, duties, cesses, charges levied under any law other than the GST Acts
if charged separately

►   
Any amount
that the supplier
is liable to pay but which has been
incurred by the recipient & not included in the consideration

►   
Incidental expenses & any
amount charged for anything done by the supplier at the time of or before
delivery of supplies

►   
Interest, late fee, penalty
for delayed payment of consideration

►   
Subsidies directly linked to
the price except subsidies provided by the Central & State Governments

The
value of the supply shall exclude discount
which is given:

►   
before or
at the time of the supply if such discount
has been recorded
in the invoice

►   
after time
of supply, if discount
is in terms of an agreement,
specifically linked to relevant invoices & ITC attributable to the
discount has been reversed by the recipient

Explanation:
For the purposes of this Act,–

(a)
persons shall be deemed to be “related persons” if––

(i)
such persons are officers
or directors of one another’s businesses;

(ii)
such persons are legally recognised partners in business;

(iii)
such persons are employer
and employee;

(iv)
any person directly or indirectly owns, controls or holds 25% or
more of the outstanding voting stock or shares of both of them;

(v)
one of them directly or indirectly controls the other;

(vi)
both of them are directly or indirectly controlled by a third person;

(vii)
together they directly or indirectly control a third person; or

(viii)
they are members
of the same family;

(b)
the term “person” also includes legal persons;

(c)
persons who are associated in the business of one another in that one is the

sole agent or
sole distributor or sole concessionaire of the
other, shall be deemed to be related.