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CMA Intermediate · Direct and Indirect Taxation · Time and Value of Supply

Mehta Traders (supplier) issued a tax invoice for Rs 50,000 for taxable goods on 10 July. It received Rs 51,000 from the buyer on 12 July, 12 July being the earlier of the date of entry in books and credit to bank. The supplier opts for the proviso on excess receipts. The extra Rs 1,000 will have its time of supply as:

The time of supply for the extra Rs 1,000 is the date of issue of the invoice relating to that excess amount. The proviso lets a supplier choose this when the excess received is up to Rs 1,000, which is satisfied here.

  1. A12 July, the date of receipt of the excess
  2. BThe date on which the supplier files its periodical return
  3. CThe date of issue of invoice relating to the excess amountCorrect
  4. D10 July, the date of the original invoice

Explanation

The proviso to Section 12(2) says that where a supplier receives up to Rs 1,000 in excess of the amount in the tax invoice, the time of supply for the excess is, at the supplier's option, the date of issue of invoice for that excess. Rs 1,000 is within the limit, so the option applies.

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