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CS Executive · Tax Laws and Practice · Time, Value and Place of Supply

A supplier of taxable goods issues a tax invoice for Rs 40,000 on 5 June and receives Rs 40,800 from the buyer on 3 June, before the invoice. Which statement is correct about the excess Rs 800?

At the supplier's option, the time of supply for the excess Rs 800 is the date of issue of invoice for that excess. The proviso allows this for excess receipts up to Rs 1,000 over the invoiced amount, so the payment date is not compulsory.

  1. AThe time of supply of the excess Rs 800 is mandatorily 3 June
  2. BThe excess is ignored for time of supply purposes
  3. CAt the supplier's option, the time of supply of the excess Rs 800 is the date of issue of invoice for that excess amountCorrect
  4. DThe time of supply of the excess Rs 800 is the date of return filing

Explanation

The proviso to section 12(2) applies where the supplier receives up to Rs 1,000 in excess of the invoice amount. Here the excess is Rs 800, within the limit, so the supplier may choose the date of issue of invoice for that excess instead of the payment date. It is therefore not mandatory to treat 3 June as the time for the excess.

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