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CA Final · Indirect Tax Laws · Time of Supply

Anjali Fashions, a registered supplier, issues Invoice No. 77 for taxable goods on 28 February for Rs 4,00,000. The goods are supplied on 5 March after a change in the rate of tax effective 1 March. The customer pays on 10 March, credited to the supplier's bank that day. Under the provisions on change in rate of tax, what is the time of supply?

The time of supply is 10 March. Where goods are supplied after a change in tax rate, the invoice was issued before the change and payment is received after it, the date of receipt of payment is the time of supply.

  1. A28 February, being the invoice date
  2. B10 March, being the date of receipt of paymentCorrect
  3. C1 March, being the date of the rate change
  4. D5 March, being the date of supply

Explanation

The goods are supplied after the change in rate. Where the invoice was issued before the change but payment is received after the change, the time of supply is the date of receipt of payment. The payment was received on 10 March, so that date applies. The proviso on bank credit after four working days only matters for payments received just around the change date, and does not apply here.

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