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CS Executive · Tax Laws and Practice

Time, Value and Place of Supply for CS Executive

Time of supply decides when GST becomes payable. Value of supply decides how much tax is charged, starting from transaction value under section 15. Place of supply decides whether the supply is intra-State (CGST and SGST) or inter-State (IGST). Solve each question by finding the time, then the value, then the place.

What this chapter covers

This chapter answers three questions for every supply: when is tax due, on what amount, and which tax applies. The first is time of supply, the second is value of supply, and the third is place of supply. Each question has its own rules in the CGST and IGST Acts, and exam problems often ask you to use two or three of them together.

Time of supply for goods and services follows its own sections. Section 14 of the CGST Act then overrides them when the rate of tax changes. Value starts with transaction value under section 15, which lists what is added to the price and what is left out, such as properly recorded discounts. Where transaction value cannot be used, the prescribed valuation rules apply. Place of supply then fixes the nature of the supply and the tax that follows. Separate rules cover goods and services.

This chapter feeds the rest of the GST part of Paper 7. Levy and charge, input tax credit, invoices, returns and payment of tax all depend on the time, value and place you arrive at here. If you get the value wrong, the tax is wrong. If you get the place wrong, you charge the wrong tax head. Treat this chapter as the base for the later GST chapters.

This chapter is full of problem-type questions with a clear answer: a date, a value or a tax head. Such questions reward a student who knows the rules and sets out the working step by step. Because answers are written, you can earn marks for quoting the right provision and showing each step even if a figure slips. It is also a base chapter. Time, value and place feed into tax liability, credit and returns, so the effort you put in here pays back across the GST part of the paper.

Time, Value and Place of Supply: topics in the order to study them

  1. 1Time of Supply of GoodsStart with the basic idea of the date on which liability arises, using the simplest case of goods.
  2. 2Time of Supply of ServicesServices follow a similar logic with different trigger dates, so learn them right after goods and compare.
  3. 3Change in Rate of Tax and Time of SupplySection 14 overrides the general rules, so you need goods and services first to apply it.
  4. 4Value of Taxable Supply: Transaction ValueOnce you know when tax is due, learn on what amount it is charged, starting with section 15.
  5. 5Valuation Rules and Determination of ValueThese apply only when transaction value cannot be used, so they come after the main rule.
  6. 6Place of Supply of GoodsPlace decides the tax head. Goods are simpler because they depend mostly on movement and location.
  7. 7Place of Supply of ServicesServices have more cases and exceptions, so study them last with the goods rules fresh in mind.

How to prepare Time, Value and Place of Supply

This chapter rewards a structured method more than raw memory. Build each rule, then practise applying it to dates, figures and facts.

  1. Read sections 14 and 15 of the CGST Act in the official text first. Note the exact conditions and the order of the clauses.
  2. For time of supply, draw a simple timeline for each question. Mark the supply date, invoice date, payment date and any rate change date.
  3. For section 14, list the cases in a small grid of supplied before or after the change, invoice before or after, and payment before or after. Practise until you can reach the answer without looking.
  4. For value, make two lists from section 15(2) and 15(3): what is added to the price and what is excluded. Then solve questions adding and excluding items one by one.
  5. Learn the related person tests in the Explanation to section 15 and understand when transaction value fails, so you know when to use the valuation rules.
  6. For place of supply, first decide whether the supply is goods or services, then work through the rules in order and stop at the first one that fits.
  7. Finish with written practice. Write each answer as the provision, the facts, the working and a clear conclusion, citing the section.

Common mistakes in Time, Value and Place of Supply

  • Applying the general time of supply rules when the rate of tax has changed.

    Fix: Check the facts for a rate change first. If there is one, go straight to the section 14 cases.

  • Using the wrong date for receipt of payment.

    Fix: Take the earlier of the date entered in the books and the date of bank credit, then check the four working days proviso.

  • Adding CGST, SGST or IGST to the value before computing tax.

    Fix: Include only taxes under other laws that are charged separately. Exclude GST and compensation cess from value.

  • Deducting every discount from value.

    Fix: Check whether the discount was recorded in the invoice. For a later discount, check the prior agreement, link to invoices and ITC reversal.

  • Skipping the related person test.

    Fix: Ask if the parties are related under the Explanation to section 15 and whether price is the sole consideration. If not, move to the valuation rules.

  • Writing only the final answer with no provision or working.

    Fix: State the provision, apply it to the facts in steps and end with a clear conclusion, citing the section.

Last-day revision: Time, Value and Place of Supply

  • Section 14 applies notwithstanding sections 12 and 13 when the rate of tax changes.
  • Date of receipt of payment is the earlier of the date entered in the books and the date of credit in the bank account.
  • Under the proviso to section 14, if the bank credit comes after four working days from the date of rate change, the credit date is the date of receipt.
  • Transaction value is the price actually paid or payable when the parties are not related and price is the sole consideration.
  • Taxes under other laws are added to value if charged separately, but not CGST, SGST, UTGST or the Compensation Cess Act levy.
  • Incidental expenses such as commission and packing charged by the supplier are included in value.
  • Interest, late fee or penalty for delayed payment is included in value.
  • Subsidies directly linked to price are included, but not those given by the Central or State Governments.
  • A discount is excluded if recorded in the invoice at or before supply; a later discount also needs an agreement linked to invoices and ITC reversal by the recipient.
  • Persons holding 25% or more of the voting stock of both are related persons.
  • If transaction value cannot be used, the value is found as prescribed in the valuation rules.
  • Place of supply decides whether the supply is intra-State or inter-State, and so which tax applies.

Time, Value and Place of Supply practice questions

Time, Value and Place of Supply in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Time, Value and Place of Supply: frequently asked questions

Which sections of the CGST Act matter most in this chapter?

Section 14 for change in rate of tax and section 15 for value of taxable supply are the core provisions. Learn their conditions closely. Time of supply for goods and services and the place of supply rules complete the chapter.

How do I decide the time of supply when the rate of tax changes?

Check whether the supply was made before or after the rate change. Then note whether the invoice and the payment fall before or after it. Match this to the cases in section 14 and pick the date it gives.

Is a discount always excluded from the value of supply?

No. A discount given before or at the time of supply is excluded only if it is recorded in the invoice. A discount given after supply is excluded only if it is based on an agreement made at or before supply, linked to specific invoices, and the recipient has reversed the related input tax credit.

When do I use the valuation rules instead of transaction value?

Use them when the value cannot be determined under section 15(1). This happens, for example, when the parties are related or the price is not the sole consideration. The value is then determined in the manner prescribed.

Why does place of supply matter in GST?

It decides whether a supply is intra-State or inter-State. That decides whether CGST and SGST or IGST is charged. A wrong place leads to the wrong tax head.