Time, Place and Value of Supply under GST for CA Final

Understand Time, Place and Value of Supply

Key rules to remember

Intra-state vs inter-state test

Supplier location and place of supply in the same State/UT → intra-state (CGST + SGST/UTGST); in different States/UTs → inter-state (IGST)

Import, export and supplies to or from a SEZ are treated as inter-state.

Time of supply of goods (forward charge)

Section 12(2): earlier of (a) the date of issue of invoice or the last date by which the invoice should have been issued, and (b) the date of receipt of payment. Advances for goods are exempt under Notification 66/2017-CT, so in practice the invoice trigger governs.

Invoice is due on removal if goods move, or on delivery or making available if they do not move. If the invoice is issued before the due date, the actual issue date applies; if it is issued late, the due date applies. So the time of supply of goods rests on the invoice date or the due date for the invoice, whichever is earlier.

Time of supply of services (forward charge)

Invoice issued within the prescribed period: earlier of invoice date and payment date. Invoice not issued in time: earlier of date of provision of service and payment date

The prescribed period is 30 days from the service, and 45 days for insurers, banking companies and financial institutions including NBFCs. An advance payment received before the invoice or the service is a trigger under the earlier-of rule in Section 13(2).

Time of supply under reverse charge

Goods: earliest of date of receipt of goods, payment date, or the 31st day after the supplier's invoice date. If the time cannot be determined by any of these three, the date of entry in the recipient's books applies. Services: earlier of the date of payment and the 61st day after the invoice date. If no invoice is issued, or the invoice is not provided within that period, the date of entry in the recipient's books applies.

Payment date is the earlier of the date entered in the books and the date the bank account is debited. The books-entry fallback applies to both goods and services. For goods it is in Section 12(3) and for services in Section 13(3).

Place of supply of goods

Goods moved: where movement ends. Movement on third party's direction: third party's principal place of business. No movement: location at time of delivery. Installation or assembly: place of installation

Goods supplied on board a conveyance: where they are taken on board.

Place of supply of services: general rule

B2B: location of recipient. B2C: location of recipient if on record, otherwise location of supplier

Specific rules override this: immovable property is where the property is located; restaurant and similar services where actually performed; admission to an event where the event is held.

Transaction value

Value = price paid or payable + inclusions − exclusions

Applies only if supplier and recipient are not related and price is the sole consideration.

Inclusions in value

Taxes, duties, cesses and fees under any law other than the GST Acts and the GST Compensation Cess Act; any amount the supplier is liable to pay in relation to the supply but which has been incurred by the recipient and is not included in the price; commission, packing and other incidental charges; interest, late fee or penalty for delayed payment; subsidies directly linked to the price, other than Government subsidies

Add them only if not already in the price.

Exclusions from value

Discount given before or at the time of supply and shown on the invoice; post-supply discount if agreed earlier, linked to specific invoices and recipient reverses ITC; pure agent reimbursements; GST itself

A post-supply discount fails if any of these conditions is missing.

Value where price includes GST

Value = Total price × 100 ÷ (100 + GST rate %); GST = Total price × rate ÷ (100 + rate)

Use the combined rate of CGST + SGST, or the IGST rate.

How to solve Time, Place and Value of Supply questions

1. 1Identify the supply: goods or services, who is the supplier, who is the recipient, registered or unregistered, and whether reverse charge applies.
2. 2Mark the dates in the case: removal or delivery, service completion, invoice, advance, payment and receipt of goods. Put them in a timeline.
3. 3Apply the time-of-supply rule that matches the supply type and charge. Pick the earliest trigger date and state why the others are later.
4. 4Find the supplier's location and the recipient's location. Apply the matching place-of-supply rule, goods or services, and check for a specific rule before using the general one.
5. 5Compare supplier location and place of supply to decide intra-state or inter-state, and name the taxes (CGST + SGST or IGST).
6. 6Check that the transaction value can be accepted: no relationship, price is the sole consideration. If not, use the valuation rules in order.
7. 7Add the inclusions, deduct the permitted exclusions, and compute the taxable value. Compute tax on it, and state the conclusion in one line.

Quickest way: Three-line scan: Date, Place, Price

Common mistakes in Time, Place and Value of Supply

• Treating the date of payment as always decisive for time of supply.

  Students remember 'earlier of invoice or payment' and forget the invoice due date.

  Fix: For goods, use the invoice date or the due date for the invoice, whichever is earlier. Advances for goods are exempt under Notification 66/2017-CT, so in practice the invoice trigger governs and an advance does not pull the time of supply earlier. If the invoice is late, the due date is used, not the actual invoice date.

• Using the recipient's location for every service.

  The general rule is easy to memorise, so the specific rules get skipped.

  Fix: Scan the service first. Immovable property, event admission, restaurant, training, passenger transport and intermediary services each have their own rule.

• Deciding intra-state or inter-state by where the invoice was raised or where the supplier is registered.

  Students mix up supplier location with place of supply.

  Fix: Always write both locations. Tax type depends on comparing supplier location with place of supply.

• Including GST in the value of supply.

  The word 'inclusions' makes students add every tax on the invoice.

  Fix: Include other taxes such as customs duty or State excise, but never CGST, SGST, IGST or the compensation cess.

• Deducting a post-supply discount without checking the conditions.

  Students treat every discount as a reduction in price.

  Fix: Deduct only if the discount was agreed at or before the supply, is linked to specific invoices, and the recipient reverses the related input tax credit. Otherwise it stays in the value.

• Applying the reverse charge time rule to a normal forward-charge supply, or the reverse.

  The 31-day and 61-day limits get mixed up.

  Fix: First decide who pays tax. For reverse charge on goods, use the earliest of receipt of goods, payment and the 31st day after the invoice date; if none of these can be determined, use the date of entry in the recipient's books. For services, use the earlier of payment and the 61st day after the invoice date, and if no invoice is issued (or it is not provided in that period), use the date of entry in the recipient's books.

Worked examples