Skip to content

CMA Final · Indirect Tax Laws and Practice · Time of Supply

A foreign associated enterprise located outside India provides a taxable service to Kaveri Industries Ltd. in India, on which tax is payable under reverse charge. The supplier issues an invoice on 1 June 2026. Kaveri enters the service in its books on 20 June 2026 and pays on 15 July 2026. Under the second proviso to section 13(3), the time of supply is:

The time of supply is 20 June 2026. For services from an associated enterprise located outside India, the time of supply is the earlier of the date of entry in the recipient's books or the date of payment, and the book entry on 20 June comes first.

  1. A1 June 2026, the invoice date
  2. B20 June 2026, the date of entry in recipient's booksCorrect
  3. C15 July 2026, the date of payment
  4. D31 July 2026, the day after sixty days from the invoice

Explanation

For supply by associated enterprises where the supplier is outside India, the time of supply is the earlier of the date of entry in the recipient's books and the date of payment. 20 June is earlier than 15 July. The sixty-day rule from the invoice would give 31 July, but it does not apply here.

Did you get it right without looking?

One question tells you little. A timed set on Time of Supply shows your real accuracy, how long you take and where you lose marks.

Practise Time of SupplyFree diagnostic mock

More Time of Supply questions