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

Under section 12(6) of the CGST Act, 2017, what is the time of supply to the extent it relates to interest or late fee charged for delayed payment of consideration for a supply of goods?

The time of supply is the date on which the supplier actually receives the interest, late fee or penalty. Section 12(6) ties the liability to receipt of the addition in value, not to its accrual, the original invoice, or the recipient's bookkeeping.

  1. AThe date of the original invoice
  2. BThe date on which the supplier receives such addition in valueCorrect
  3. CThe date on which the recipient records the interest in books
  4. DThe date on which the interest accrues

Explanation

Section 12(6) states 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 that addition. Accrual or original invoice date does not apply.

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