Skip to content

CA Final · Indirect Tax Laws · Time of Supply

Under section 13(3) of the CGST Act, a registered recipient, Sagar Logistics, receives taxable services under reverse charge from an unregistered individual. The supplier issued an invoice on 1 December, which is required to be issued by the supplier. Sagar paid on 5 February, by bank debit and book entry the same day. What is the time of supply?

The time of supply is the day immediately following sixty days from the invoice date, which is 30 January. Under section 13(3), reverse charge services are taxed at the earlier of payment and that sixty-day date. Payment on 5 February is later, and the thirty-day rule applies only to goods.

  1. A1 December, the invoice date
  2. B5 February, the payment date
  3. CThe date immediately following sixty days from 1 DecemberCorrect
  4. DThe date immediately following thirty days from 1 December

Explanation

For reverse charge services, section 13(3) takes the earlier of the payment date and the day following sixty days from the supplier's invoice date. From 1 December, sixty days end on 29 January, so the following day is 30 January. That is earlier than payment on 5 February. The thirty-day period belongs to goods under section 12(3), so it is wrong here.

Did you get it right without looking?

One question tells you little. A timed set on Time of Supply shows your real accuracy, how long you take and where you lose marks.

Practise Time of SupplyFree diagnostic mock

More Time of Supply questions