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

Sharma Traders, a supplier of taxable services, issued an invoice showing Rs 40,000 and received Rs 40,800 on the invoice date or earlier in a single payment. The excess Rs 800 is not covered by any invoice. According to the proviso to Section 13(2), the time of supply for the excess amount of Rs 800 is, at the supplier's option:

At the supplier's option, the time of supply for the Rs 800 excess is the date of issue of the invoice relating to that excess amount. The proviso permits this where the excess received over the invoiced amount is up to one thousand rupees.

  1. AThe date of receipt of the excess payment
  2. BThe date of issue of invoice relating to such excess amountCorrect
  3. CThe date of provision of service
  4. DThe date on which the periodical return is filed

Explanation

Where excess received is up to Rs 1,000 over the amount in the tax invoice, the supplier may choose the date of issue of invoice relating to that excess as the time of supply for it. Rs 800 is within the Rs 1,000 limit, so the option applies. Payment date would be the default without the option.

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