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CA Final · Indirect Tax Laws · Supply under GST

Kaveri Appliances (registered) sells a machine to Delta Works on 10 June. The invoice was issued on 18 June, the last date permitted under section 31 was 20 June, and Delta paid the full price in Kaveri's bank account on 5 June. Payment was entered in Kaveri's books on 7 June. What is the time of supply of goods under section 12(2)?

The time of supply is 5 June. Under section 12(2) it is the earlier of the invoice date or last permitted invoice date and the payment receipt date. Payment receipt is the earlier of bank credit and books entry, which is 5 June, earlier than 18 June.

  1. A5 June, being the earlier of the invoice date and the payment date, with payment taken as the earlier of books entry and bank creditCorrect
  2. B7 June, being the date of entry in the books
  3. C18 June, being the date of invoice
  4. D20 June, being the last date for issuing the invoice

Explanation

Time of supply is the earlier of the invoice date (or last date for issuing the invoice) and the date of payment receipt. Under Explanation 2, payment receipt is the earlier of books entry and bank credit, which is 5 June. The invoice date 18 June is later, so 5 June applies. Option B takes the later of the two payment dates, which is wrong.

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