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CA Intermediate · Taxation · Time of Supply

Sundaram Traders, a registered supplier in Coimbatore, supplied goods on 10 March 2026 and issued the invoice on 22 March 2026. It received payment on 5 March 2026 (before the supply). For the supply of goods involving movement, the goods were removed on 10 March 2026. Under the CGST Act, 2017 the time of supply of goods (forward charge) is the earliest of the date of invoice or the last date on which the invoice should have been issued, or the date of receipt of payment. Taking the advance as relating to this supply, what is the time of supply to the extent of the advance?

The time of supply is 5 March 2026. For goods under forward charge, it is the earlier of the invoice date, or the last date by which the invoice should have been issued, and the date of receiving payment. The advance was received on 5 March, before both other dates, so it governs to the extent of the advance.

  1. A5 March 2026Correct
  2. B10 March 2026
  3. C22 March 2026
  4. D31 March 2026

Explanation

For goods under forward charge, time of supply is the earlier of the invoice date (or last date on which invoice should have been issued) and the date of receiving payment. The last invoice date is the removal date 10 March, the invoice was on 22 March, and payment was on 5 March. The earliest is 5 March 2026, so tax is payable on the advance from that date. 10 March would be the answer only if no advance had been received.

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