Time and Value of Supply
CA.PREETY PARIK
Time of SupplyTime of Supply = Liability to pay Tax
Time of Supply
Payment
Invoice
Date of Issue
of Invoice
Due Date for
Issue of
Invoice –
Sec 31
Date of
payment
entered in
Books of
Account
Date of
receipt
credited in
Bank
Statement
Date for Issue of Invoice
- Sec.31
Supply of Goods
Time for Issue of Invoice
Involves Movement of Goods
Before or at the Time of Removal of
Goods
Does not involve movement of Goods
Before or at the Time of Delivery or
making available the Goods to the
recipient
Certain Supplies notified by
Government on recommendation of
Council
Time and Manner for Issue of Invoice as
may be prescribed
Continuous supply of GoodsSuccessive Statement of accounts are
involved
Before or At the time each statement is
issued
Continuous supply of GoodsSuccessive payments are involved
Before or At the time each payment is
received
Goods sent on approval
Before or At the time of supply or six
months from the date of removal
whichever is earlier
Date for Issue of Invoice
- Sec.31
Supply of Services
Time for Issue of Issue
General
Before Supply of Service
or Within 30 days of Supply of Service
In case of Banks/ Financial
Institutions/ NBFC/ Insurance
Within 45 days of supply of service
Continuous supply of ServicesDue date for payment is ascertainable
from the contract
On or before the due date for payment
Continuous supply of ServicesDue date for payment is not
ascertainable from the contract
On or before the time supplier receives
payment
Continuous supply of ServicesPayment linked to completion of an
event
On or before the date of completion of
event
Time of SupplyGoods
Earlier of the Following: Date of issue of Invoice
 Due Date for issue of invoice u/s 31
 Date of receipt entered received in Books
of Account of Supplier
 Date of Credit in Bank Statement of
supplier.
Time of SupplyGoods (Reverse charge Mechanism)
Earlier of the Following: Date of receipt of Goods
 Date following 30days from date of invoice/ any
other document issued by the supplier
 Date of payment made in Books of Account of
recipient
 Date of debit of payment in Bank Statement of
recipient
-----------------------------------------------------------------If above not possible to determine TOS as above then:Date of entry in Books of Account of the recipient of Supply
Time of SupplySERVICES
(if invoice is issued within time limit = 30 days/ 45 days
from provision of Service)
Earlier of the Following: Date of issue of Invoice
 Date of receipt entered in Books of Account of
supplier
 Date of credit of receipt in Bank Statement of
supplier
---------------------------------------------------If above not possible to determine TOS as above then:Date of entry of receipt of services in Books of Account
of the recipient of Supply
Time of SupplySERVICES
(if invoice is not issued within time limitof 30 days/45
days from provision of Service)
Earlier of the Following: Date of provision of service
 Date of receipt entered in Books of Account of
supplier
 Date of credit of receipt in Bank Statement of
supplier
Time of SupplyServices (Reverse charge Mechanism)
Earlier of the Following: Date following 60 days from date of invoice/
any other document issued by the supplier
 Date of payment entered in Books of Account
of recipient
 Date of debit of payment in Bank Statement of
recipient
-----------------------------------------------------------------If above not possible to determine TOS as above then:Date of entry in Books of Account of the recipient of
Supply
Time of Supply Import of Services between associated enterprises
Supplier of services is located outside India
TOS= Date of entry in Books of Account of recipient or
date of payment, whichever is earlier
 Import of Services after the appointed day
Liable to Tax under GST even if Invoice has been
received or payment has been made before the
appointed day. If the Tax on such import has been paid
in full under existing law, no GST. If tax has been paid
in part, balance amount of Tax will be paid under GST
Time of SupplyGoods or Services –By issue of Voucher
 If Supply if identifiable – Date of Issue of Voucher
Else
 Date of Redemption of Voucher
Time of SupplyGoods and Services
 Supply deemed to made = to the Extent covered by
Invoice or Payment.
 In case of payment of upto Rs.1000,
TOS= Date of Issue of Invoice, at the option of
supplier
 If TOS cannot be determined by any of the previous
provisions (as covered by earlier slides) then:TOS= Date on which return is to be filed or
Date on which Tax is Paid
Time of SupplyGoods or Services –
 Addition in value of Supply on account of
late payment of consideration for supply by
way of interest, penalty, late fees
= Date of receipt of such Value by the
supplier
Time of SupplySupply of
Goods
Date of
issue of
Invoice
Last date
for issue
of Invoice
Date of
payment
in books
of
Account
Date of
TOS
payment
in Bank
Statement
Invoice
raised
before
Removal
28/10/17
02/11/17
30/11/17
1/12/17
28/10/17
Advance
Received
02/11/17
02/11/15
31/10/17
01/11/17
31/10/17
Delayed
Invoice
26/10/17
20/10/17
05/11/17
07/11/2017
20/10/17
31/01/2018
15/3/2018
16/03/2017
31/01/2018
Goods sent 01/03/2018
on
approval
Goods sent
31/07/2017
Time of SupplyThere is change in Tax Rate, TOS will be as per the following:-
Goods or Services supplied before Change
Before Change After Change
Invoice Issued
Payment Received
Invoice Issued Payment Received
Payment
Received
Invoice Issued
Time of Supply
Earlier of the Two
Date of Issue of
Invoice
Time of receipt of
payment
Payment Received= Date of payment entered in Books or credit in bank
whichever is earlier.
Receipt of bank =Credit in bank= after four working days from change in tax
Time of SupplyThere is change in Tax Rate, TOS will be as per the following:-
Goods or Services supplied After Change
Before Change
After Change
Invoice Issued
Payment Received
Invoice Issued
Payment
Received
Payment Received Invoice Issued
Time of Supply
Earlier of the Two
Date of receipt
Date of issue of
Invoice
Payment Received= Date of payment entered in Books or credit in bank
whichever is earlier.
Receipt of bank =Credit in bank= after four working days from change in tax
Value of SupplySupply of Goods or Services
 Supplier and Recipient are not related
Price is sole consideration of Supply
VALUE of Supply = Transaction Value (TV)
TV= Price Actually paid or payable for supply
Value of SupplyValue of Supply Includes: Taxes, duties, cess, charges levied under any law other
than GST, if charged by Supplier
 Amount payable by supplier wrt supply but incurred/
paid by recipient and not included in TV
 Incidental Expenses
 Amount charged for anything done before/ at the time
of supply
 Interest/ late fees/ penalty for delayed payment of
consideration for supply
 Subsidies (other than Central/State Govt) linked to
price.
Value of Supply DISCOUNT
Value of Supply not to include
- Discount given before or at the time of supply and
recorded on invoice of supply.
- Discount after the supply if
a. It is as per agreement entered before/at time of
supply
b. It is specifically linked to relevant invoices
c. ITC wrt discount (on basis of credit note issued by
supplier) has been reversed by the recipient of supply.
Value of Supply Consideration is not Wholly in Money
 Open Market Value (MV)
 Sum of Money+ Money value of consideration not in
money
 Value of like kind and quality
 Sum of Money + ( consideration not in money= 110%
of cost of production/manufacture/acquisition)
 Sum of money + (consideration not in money=
residual method= reasonable means)
# sequence to be followed
Value of Supply Open Market Value
 Full Value in money excluding GST
 Transaction between unrelated supplier and recipient
 Price is consideration of supply
 Supply is at same time when the supply being valued is
made
Value of Supply Supply of like kind and quality
 Supply in similar circumstances
 Has
characteristics, quality, quantity,
components, materials and reputation
 Resembles supply being valued
functional
Value of Supply Supply between Related or Distinct Persons
 Open Market Value
If recipient is eligible for ITC, invoice value deemed to
be open market value
 Value of like kind and quality
 110% of cost of production/acquisition
(in case of services, supplier may disregard 110% rule)
 Residual Method
# sequence to be followed
Value of Supply Supply between Principal and Agent
 Open Market Value of supply or
90% of price charged by Agent to customer of like
kind and quality (at option of supplier)
 110% of cost of production/acquisition
(in case of services, supplier may disregard 110% rule)
 Residual Method
# sequence to be followed
Value of Supply Specific Services-
Money Changing / purchase or Sale of Foreign Currency
 (Buy Rate- Sale Rate) * No of units
 1% of amount of rupees received or paid
 1% Lesser of any currency receivable in rupees
OR option
 > Rs.1 Lacs = 1% of value of exchange, min Rs.250
 <1L >10L= ½% of (value of exchange -1L) + Rs.1000
 >10L= 1/10% of (Value of exchange- 10L) +Rs.5000
Value of Supply Specific Services-
Booking of Tickets by Air Travel Agent for Travel by Air
Domestic Travel= 5% of Basic Fare
International Travel =10% Basic Fare
Basic Fare = Part of Air Fare on which commission is
paid to travel agent by Airline company
Value of Supply Specific Services-
Life Insurance Business
NA- entire premium paid for risk cover in life insurance
 Gross Premium – allocated for investment
(if intimated to policy holder at the TOS)
 In case of single Annuity policy = 10% premium
 In all other cases
First Year= 25% premium
Subsequent Years = 12.5% premium
Value of Supply Specific Goods Trading in Second hand goods
Used goods as such
including minor processing done that does not change
nature of Goods
 NO ITC taken on purchase
VALUE = Selling Price- Purchase Price
If –ve Value shall be ignored.
Value of Supply Specific Goods or Services-
Supply against Voucher, Token, Coupon or Stamp
Value= Money Value of Goods/ Services or both
redeemable against such token, voucher, coupon or
stamp.
 Value of Taxable Service shall be deemed to be NIL
Provided by class of Service providers – *between
distinct persons
As may be notified by the government on
recommendation of council
Value of Supply Specific Services
Supply of Services of Pure Agent
Value of Supply shall exclude all cost of services incurred
by the Agent on behalf of the principal *** subject to
conditions
Principal
at
Aurangaba
d
CIF
Agent at
Bombay
Custom Duty,
port charges
Exclude
charges
from
valuation
Value of Supply-
Supply of Services of Pure Agent
Conditions: Contract is between third party and recipient
 Recipient is liable to make payment to third party
 Recipient authorizes the supplier to make payment on
his behalf
 Recipient knows the services shall be provided by third
party
 Payment made by supplier has been indicated in
invoice issued by supplier
 The supplier recovers only such amount paid to third
party
 Service procured by the supplier are in addition to
supply he provides on his own account.