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CA Intermediate · Taxation · Time of Supply

Sharma Traders, a registered supplier, sold goods to Kapoor Stores on 10 June. The goods were removed for delivery on 12 June, the invoice was issued on 14 June and payment was received on 20 June. The supply involves the removal of goods. What is the time of supply of goods under the forward charge, applying the general rule?

The time of supply is 12 June. For goods that are removed, the tax point under the forward charge is the earliest of the removal date, the invoice date and the payment receipt date. Removal on 12 June precedes the invoice on 14 June and payment on 20 June.

  1. A10 June
  2. B12 JuneCorrect
  3. C14 June
  4. D20 June

Explanation

For goods requiring removal, the time of supply is the earlier of the date of removal and the date on which the supplier issues the invoice, or the date of receipt of payment where that is earlier. Here removal on 12 June is the earliest of 12 June, 14 June and 20 June, so the time of supply is 12 June. The date of the order (10 June) is not a trigger.

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