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

Under the CGST Act, 2017, the time of supply of goods to the extent it relates to an addition in the value of supply by way of interest, late fee or penalty for delayed payment of any consideration is:

The time of supply for interest, late fee or penalty charged for delayed payment is the date on which the supplier actually receives that additional amount, not the original invoice date, because section 12(6) ties the liability to receipt of the addition.

  1. AThe date of issue of the invoice for the original supply
  2. BThe date on which the supplier receives such addition in valueCorrect
  3. CThe date on which the recipient records the addition in his books
  4. DThe date of delivery of the goods

Explanation

Section 12(6) provides that the time of supply of such an addition in value (interest, late fee or penalty for delayed payment) is the date on which the supplier receives it. The original invoice date is wrong because the addition is a separate event dependent on receipt, not the original supply.

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