CS Professional · Goods and Services Tax (GST) and Corporate Tax Planning · Time of Supply
Sharma Traders issues a tax invoice of Rs 1,00,000 for goods on 10 May. On 2 May it had received an advance of Rs 30,000 for the same supply. Applying Explanation 1 to Section 12(2), the time of supply is:
The time of supply is split: 2 May for Rs 30,000, the part covered by the earlier advance, and 10 May for the balance Rs 70,000 covered by the invoice. Supply is deemed made only to the extent covered by the invoice or payment.
- A10 May for the whole Rs 1,00,000
- B2 May for Rs 30,000 and 10 May for the balance Rs 70,000Correct
- C2 May for the whole Rs 1,00,000
- D10 May for Rs 30,000 and 2 May for Rs 70,000
Explanation
Supply is deemed made to the extent covered by the invoice or the payment. The advance of Rs 30,000 on 2 May is earlier than the invoice, so the time of supply for that part is 2 May. The balance Rs 70,000 is covered by the invoice on 10 May. Treating the whole at 10 May ignores the advance.
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