Skip to content

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

Under Section 13(6), Verma Logistics, a service supplier, charged interest for delayed payment on an invoice. The interest of Rs 2,000 was billed on 15 June but actually received by the supplier on 9 July. What is the time of supply of this interest?

The time of supply is 9 July. For interest, late fee or penalty for delayed payment, the time of supply is the date the supplier actually receives that addition in value, not the date of billing or of the original invoice or service.

  1. AThe date of the original service provision
  2. B15 June
  3. C9 JulyCorrect
  4. DThe date on which the original invoice was issued

Explanation

Section 13(6) states that the time of supply for an addition to value by way of interest, late fee or penalty for delayed payment is the date on which the supplier receives that addition. The interest was received on 9 July. Billing date 15 June is irrelevant.

Did you get it right without looking?

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

Practise Time and Value of SupplyFree diagnostic mock

More Time and Value of Supply questions