Skip to content

CS Professional · Goods and Services Tax (GST) and Corporate Tax Planning · Supply under GST

Sharma Traders Pvt. Ltd. supplies goods worth Rs 5,00,000 (excluding tax). It receives an advance of Rs 2,00,000 on 5 March, and issues the invoice for the full Rs 5,00,000 on 20 March. Applying Section 12(2) with Explanation 1 and ignoring any invoicing deadline earlier than 20 March, what is the time of supply?

Time of supply is split: Rs 2,00,000 has its time of supply on 5 March, when the advance was received, and the remaining Rs 3,00,000 on 20 March, when the invoice was issued. Explanation 1 deems supply made only to the extent covered by invoice or payment, whichever is earlier.

  1. ARs 5,00,000 on 20 March only
  2. BRs 2,00,000 on 5 March and the balance Rs 3,00,000 on 20 MarchCorrect
  3. CRs 5,00,000 on 5 March
  4. DRs 2,00,000 on 20 March and Rs 3,00,000 on 5 March

Explanation

Explanation 1 says supply is deemed made to the extent covered by the invoice or the payment. The advance of Rs 2,00,000 is received on 5 March, which is earlier than the invoice, so that part is supplied on 5 March. The balance Rs 5,00,000 - 2,00,000 = Rs 3,00,000 is covered only by the invoice on 20 March.

Did you get it right without looking?

One question tells you little. A timed set on Supply under GST shows your real accuracy, how long you take and where you lose marks.

Practise Supply under GSTFree diagnostic mock

More Supply under GST questions