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CMA Intermediate · Direct and Indirect Taxation · Time and Value of Supply

Under Section 13 of the CGST Act, 2017, the time of supply of services (forward charge) is the earlier of the date of invoice issue (if issued within the prescribed period) or the date of receipt of payment. Mehta Consultants completes a consulting assignment on 5 August, issues the invoice on 12 August within the prescribed period, and receives payment on 20 August. What is the time of supply?

The time of supply is 12 August. Where the invoice is issued within the prescribed period, the time of supply is the earlier of the invoice date and the payment receipt date. Invoice date 12 August precedes payment on 20 August, and the service completion date does not apply.

  1. A5 August
  2. B12 AugustCorrect
  3. C20 August
  4. DThe date on which the return is filed

Explanation

The invoice was issued within the prescribed period, so the time of supply is the earlier of invoice date (12 August) and payment date (20 August). That is 12 August. 5 August is the date of provision of service, which applies only when the invoice is not issued within the prescribed period.

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