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CA Intermediate · Taxation · Time of Supply

Sharma Traders, a registered supplier of goods, issued an invoice on 12 June for goods supplied on 20 June. Payment was received on 25 June. Ignoring any special provisions, what is the time of supply of the goods under forward charge?

The time of supply is 12 June. For goods under forward charge it is the earlier of the invoice date (or the due date for invoicing) and the date of receiving payment. The invoice dated 12 June precedes the payment on 25 June, so it fixes the time of supply.

  1. A12 JuneCorrect
  2. B20 June
  3. C25 June
  4. DThe date on which the goods are delivered to the buyer's warehouse, irrespective of the invoice

Explanation

For goods under forward charge, time of supply is the earlier of the date of issue of invoice (or the last date by which the invoice should have been issued under section 31) and the date of receipt of payment. Where the invoice is issued before supply, the invoice date of 12 June is the earliest date. Payment on 25 June and supply on 20 June are both later.

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