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(1)

    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(2)
&
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

 
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.