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CMA Final · Indirect Tax Laws and Practice · Time of Supply

Under section 12(2) of the CGST Act, 2017, a supplier of taxable goods issues a tax invoice for Rs. 80,000 and receives Rs. 80,700 from the buyer before the invoice date. For the excess Rs. 700, the time of supply, at the option of the supplier, is:

The supplier may treat the date of issue of invoice for the excess Rs. 700 as its time of supply. The proviso allows this option where the excess received over the tax invoice amount is up to one thousand rupees.

  1. AThe date of receipt of the payment
  2. BThe date of issue of invoice in respect of such excess amountCorrect
  3. CThe date of delivery of goods
  4. DThe date on which the tax is paid

Explanation

The proviso to section 12(2) allows that where the excess received is up to Rs. 1,000 over the invoice amount, the supplier may treat the time of supply for the excess as the date of issue of invoice for that excess. Rs. 700 is within the Rs. 1,000 limit, so the option applies.

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