issues in time of supplyestv.in/idtc/gstaudit/pdf/ca.chitresh... · time of supply of goods- point...

Issues in Time of SupplyLive Webcast organised by Indirect Taxes Committee of ICAI

07th July, 2018

By

CA Chitresh Gupta

B.Com(H), FCA, IDT(Cert), IFRS(Cert)

Time of Supply - Need

Supply –Key

Parameters

Rate of Tax

Value of Supply

Person Liable to

pay the tax

Point of payment of

Tax (TOS)

Time of supply states

when the liability to pay

the tax would arise

Incorrect determination of

time of supply may attract

interest & other Penal

provisions

© Indirect Taxes Committee, ICAI 2

Time of Supply – Statutory Provisions

Time of Supply

Goods [Sec 12]

General Provision-Forward charge

cases

Reverse Charge Mechanism cases

Cases of Supply of Vouchers

Residuary cases

Addition in value on account of

Interest, Penalty etc

Services [Sec 13]

3© Indirect Taxes Committee, ICAI

Time of Supply of Goods

(Earliest of Following)

Date of Issue of Invoice or

Last date on which invoice is required to be issued [sec 31]

Date of Receipt of Payment

Earlier of the two -Date on which Payment in entered in books of

Account or -payment credited in the Bank account

• Where the Supplier receives an amount up to Rs 1,000 in excess of amount indicated in the tax Invoice.

At the Option of the Supplier - Time of supply is Date of

issue of invoice

Time of Supply of Goods – Sec 12(2)


Time of Supply of Goods- Point of Discussion

• Earlier Advance received in case of Supply of goods were taxable under GST

• Notification no 40/2017-CT dated 13.10.2017 exempted small assessee having aggregate turnover upto

1.50 crores from the above provision

• Notification no. 66/2017-CT dated 15.11.2017 notifies that supplier of goods not liable to pay GST on

advance received for supply of goods

Taxability of Advance in case of Supply of Goods- Varying Tax Treatments during FY 2017-18

Period

Taxability of Consideration received in Advance

Aggregate Turnover less than INR 1.5 cr

Aggregate Turnover less than INR 1.5 cr

Before 01.07.2017 Not Taxable Not Taxable

01.07.2017 to 12.10.2017 Taxable Taxable

13.10.2017 to 14.11.2017 Not Taxable Taxable

15.11.2017 onwardsNot Taxable

Not Taxable


• As per section 143(3)/(4),

• where the inputs/ Capital Goods sent for job-work are not received back

• by the “principal” after completion of job-work or otherwise or are not supplied

• from the place of business of the job worker as aforesaid within a period of one/three years

• of their being sent out,

• it shall be deemed that such inputs had been supplied by the principal to the job-worker on the day when the said inputs were sent out.

Taxability in case of Non Receipt of Input/ Capital Goods from the place of job worker


Hence, it may be noted that time of supply in such case will be the date on which said inputs were sent to job worker. The principle will be liable to pay Interest thereon

Further, it may be possible that Job worker may not be able to claim credit on account of • Expiry of the period for availment of ITC as per Sec 16(4).


Goods sent by Supplier Directly to Job worker on 20th Jan ,2018

Manufacturer

Sends Delivery Challan on 20th Jan 2018 and avail ITC on such goods

Goods are not received till 19th Jan 2019 by Manufacturer


Taxability in case of Non Receipt of Input/ Capital Goods from the place of job worker

It will be deemed as Supply of goods to JW on 20th Jan,2018. Manufacturer will• Issue Tax Invoice from 20th Jan,2018• Pay Resultant Tax & Interest accordingly

Cannot Claim ITC • Period for claiming ITC as per 16(4) was till 20th Oct,2018

Job worker

Supplier


Time of supply in case of Price Escalation


• Section 34(3) of CGST Act, where the value of goods reflected in the invoice is less than taxable value, the supplier can raise a debit note for the differential amount.

• Section 34(4) of CGST Act states that the person who issues a debit note in relation to a supply of goods orservices or both shall declare the details of such debit note in the return for the month during which such debitnote has been issued and the tax liability shall be adjusted in such manner as may be prescribed.

• No clarity on the time of supply for the purpose of paying GST on the differential amount.

• View # 1 – The time of supply will be as per the date of original invoice

• View # 2 – The time of supply to be determined as per section 12(5)(a) –residuary provision - as no invoice is raised therefore, the section 12(2) does not apply. Time of supply to be date of filing of return.

Recovery of interest on account of price escalation referred to Larger Bench of Supreme Court in Steel Authority of

India Ltd. vs. Commissioner of C. Ex., Raipur, 2015 (326) E.L.T. 450 (S.C.)


Time of Supply of Goods in case of RCM

(Earliest of Following)

Date of Receipt of Goods

Date on which Payment is made

Date immediately following 30 days from the Date of issue of

invoice by the supplier

Where it is not possible to determine the time of supply under above clauses then time of supply shall be the DATE OF ENTRY IN THE BOOKS OF ACCOUNT OF THE RECIPIENT OF SUPPLY

Time of Supply of Goods- Reverse Charge

Period of Receipt of Goods Sec 9(3)-RCM in case of Specified goods Sec 9(4)- RCM in case of Inward supply from URD

Before 01.07.2017 Not Taxable Not Taxable

01.07.2017 to 13.10.2017 Taxable Taxable

13.10.2017 onwards Taxable Non Taxable

GIT as on 31st March,2018May be taxable - residual provision but ITC could not

be availed due to non receipt of goodsNot Taxable


Time of Supply of Goods- Vouchers

Time of Supply

(in case supply of Vouchers)

If Supply is Identifiable

Date of issue of Voucher

All other caseDate of

Redemption of Voucher

Sec 2(118)“voucher” means

• an instrument where there is an obligation to accept it

• as consideration or part consideration for

• a supply of goods or services or both and

• where the goods or services or both to be supplied or the identities of their potential suppliers are either

• indicated on the instrument itself or in related documentation, including the terms and conditions of use

of such instrument;


Time of Supply of Goods- VouchersIllustration Nature of Instrument Voucher or Not

Gift Card from HDFC Bank/Sodexo Coupons for Rs 5000

It is money by way of stored value even if not encashable

Not Voucher

Coupon given to customer by Vijay Sales which allows discount of 10% on next purchase

It is a future discount by way of ‘Value to use’ not encashable

Not Voucher

Money deposited in Paytm Wallet It is money by way of stored Value though encashable Not Voucher

Cashback provided by Paytm on specified purchase

It is a future discount by way of ‘Value to use’ not encashable

Not Voucher

Prepaid Instruments: Telephone Calling card Multi-Currency Traveller’s card DTH Recharge card

It is money received in advance to be settled by making supplies in future

Not Voucher

Card given by PVR in return of Loyalty points/ consideration which allows viewing of movies for specified period without any further charge

It is an instrument with Obligation Voucher

11

Time of Supply of Goods- Interest, Penalty etc

12

Time of Supply

Addition in the value of supply by way of interest, late fee or penalty for delayed payment

of any consideration

Date on which the supplier receives such addition in

value.

What will be the Time of Supply in case of Liquidated Damages/ Forfeiture of Security Deposit/ Penalty on account of Issues relating to Quality or Due to Non Completion of work on time

© Indirect Taxes Committee, ICAI

Time of Supply of Goods- Residuary provision

Time Of Supply

(when Not Possible to Determine Time of Supply)

If Periodical Return has to be filed

Date on which such return is to be filed

Any other CaseDate on Which

CGST/SGST is paid


Time of Supply of Goods- Audit Issues

Time of supply (verification of compliance with Section 12, 13 and 14 of the Act)- GSTR-9D (Proposed Format)

1Specify instances where tax has not been paid in accordance with Section 12 / 13 read with Section 31 of the CGST Act, 2017

2Whether there was a change in rate of tax on the goods or services or both supplied during the year? Provide details where the effect of the change has not been provided. - Issue of Non Taxability of Advance to be taken care

3Details of supply of services where the supply ceased prior to completion, and no tax has been discharged thereon.

4Details of supply of goods on ‘sale on approval basis’ exceeding the time limit of 6 months and not offered to tax.



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