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

Under section 12(6) of the CGST Act, 2017, a supplier of goods charges Rs. 4,000 as interest for delayed payment by a customer, and the customer pays it on 15 April 2027. What is the time of supply for this addition in value?

The time of supply for interest, late fee or penalty for delayed payment is the date on which the supplier actually receives that addition in value. So the time of supply is 15 April 2027, not the original invoice date or due date.

  1. AThe date of the original invoice
  2. BThe date on which the delayed payment became due
  3. CThe date on which the supplier receives the interestCorrect
  4. DThe date on which the periodical return is filed

Explanation

Section 12(6) provides that the time of supply for an addition in value by way of interest, late fee or penalty for delayed payment is the date on which the supplier receives such addition. Here that is 15 April 2027. The due date and original invoice date do not apply.

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