Chapter
IV: Time & value of supply

12 & 13

Liability
to pay tax on supplies shall arise at the
time of supply. It is determined as follows:

Item

Time of supply is earliest of the following dates:

12(2):
Goods on which tax is paid
other than on reverse charge

    Date of issue of invoice, if
issued

    Last date for issue of invoice u/s 31

    Date of receipt of payment

12(3):
Goods on which tax is paid on reverse charge

    Date of the receipt of goods

    Date of receipt of payment

    Date immediately following 30 days from date of issue of invoice

13(2):
Services on which tax is paid
other than on reverse charge

    Date of issue of invoice if within last date u/s 31 & if not, then date of provision of service

    Date of receipt of payment

13(3):
Services on which tax is paid on reverse charge

    Date of receipt of payment

    Date immediately following 60 days from date of issue of invoice

 
In the
case of goods on which tax is paid on reverse charge and in the case of
services, if it is
not possible to
determine the time of supply based on the events stated above, then
date of entry in books of account of the recipient is the time of supply.

 
If it is still not possible to determine the time of supply, then if periodical return is
to be filed,
date
of filing
and if not filed, then date of payment of tax is the
time of supply [12(5) /13(5)].

 
Date of receipt of
payment shall be
earlier
of the dates on which the payment is, entered in books of account & credited to bank account.

 
If the
supplier receives an amount
up to Rs. 1000 in excess of invoice amount, the time of supply for such
excess shall, at the option of the supplier, be the
date of issue of invoice.

 
To the
extent of addition in the value by way of interest, late fee or penalty for
delayed payment of any consideration, the time of supply shall be date of
receipt of such addition.

14

Section
12 & 13 are not applicable where there is a
change in the
rate of tax
and any one of the
following dates is after the change in rate of tax:

   
Date of
supply of goods/services

   
Date of
issue of invoice

   
Date of
receipt of payment

In
such cases the time of supply is as follows:

Condition

Time of supply

Date
of
supply
of goods/services
is after change in the rate of tax and either invoice or payment is after the change

Date
of receipt of
payment or date of issue of invoice whichever
is
later

All
other cases

Date
of receipt of
payment or date of issue of invoice whichever
is
earlier

Date
of receipt of payment shall be earlier of the dates on which the payment is,
entered in his books of account & credited to his bank account. However
it shall be the date of credit in the bank account if such credit is after 4
working days from the date of change in rate of tax.

15

The
value of supply shall be the transaction value, which is the price actually
paid or payable where the supplier & the recipient are not related. Price
includes:

   
Any taxes, duties, cesses, charges levied under any law other than the GST Acts
if charged separately

   
Any amount
that the
supplier
is liable to pay
but which has been
incurred by the recipient & not included in the consideration

   
Incidental expenses & any
amount charged for anything done by the supplier at the time of or before
delivery of supplies

   
Interest, late fee, penalty
for delayed payment of consideration

   
Subsidies directly linked to
the price except subsidies provided by the Central & State Governments

The
value of the supply
shall exclude discount
which is given:

   
before or
at the time of the supply if such
discount
has been
recorded
in the invoice

   
after time
of supply, if
discount
is in terms of an agreement,

specifically linked to relevant invoices & ITC attributable to the
discount has been reversed by the recipient

Explanation:
For the purposes of this Act,–

(a)
persons shall be deemed to be “
related persons” if––

(i)
such persons are
officers
or directors
of one another’s businesses;

(ii)
such persons are legally recognised
partners in business;

(iii)
such persons are
employer
and employee
;

(iv)
any person directly or indirectly
owns, controls or holds 25% or
more
of the outstanding voting stock or shares of both of them;

(v)
one of them directly or indirectly
controls the other;

(vi)
both of them are directly or indirectly controlled by a third person;

(vii)
together they directly or indirectly control a third person; or

(viii)
they are
members
of the same family
;

(b)
the term “person” also
includes legal persons;

(c)
persons who are associated in the business of one another in that one is the

sole agent or
sole
distributor or sole concessionaire of the
other, shall be deemed to be related.