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CA Final · Indirect Tax Laws · Supply under GST

Mehta Industries issues an invoice dated 12 April for goods worth Rs 1,00,000 (tax invoice amount). Its customer pays Rs 1,00,800 on 20 April, i.e. Rs 800 over the invoice value. Assuming the supplier opts for the proviso to section 12(2), what is the time of supply for the excess Rs 800?

The time of supply for the excess Rs 800 is the date of issue of invoice for that excess amount. The proviso to section 12(2) lets the supplier choose this where the excess received over the invoice is up to Rs 1,000.

  1. A20 April, the date of receipt of payment
  2. BThe date of issue of invoice in respect of the excess amountCorrect
  3. C12 April, the original invoice date
  4. DThe date on which the periodical return is filed

Explanation

The proviso to section 12(2) applies where the excess received is up to Rs 1,000 over the invoice amount. At the supplier's option, the time of supply for that excess is the date of issue of invoice in respect of that excess. Rs 800 is within the limit, so the option is available; 20 April would apply only without the option.

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