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CMA Intermediate · Direct and Indirect Taxation · Tax Invoice - Electronic Way Bill

A registered person holds a valid tax invoice for goods, and the supplier has paid the tax and filed returns. The goods are bought in three lots delivered in April, May and June, all under the same invoice. The buyer has also filed his own return under section 39. From which point is he entitled to take credit on the whole invoice under Section 16?

Credit is available on receipt of the last lot in June. Where goods against one invoice are received in lots or instalments, Section 16 allows the registered person to take credit only upon receipt of the last lot or instalment, subject to the other conditions.

  1. AOn receipt of the first lot in April
  2. BOn receipt of the last lot in JuneCorrect
  3. COn receipt of the second lot in May, being the midpoint
  4. DOn the date of the invoice irrespective of receipt

Explanation

The first proviso to Section 16(2) states that where goods against an invoice are received in lots or instalments, credit is allowed upon receipt of the last lot or instalment. So credit is available only after the June lot arrives, subject to the other conditions. Credit on the invoice date ignores the receipt condition in clause (b).

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