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Issues in Time of SupplyLive Webcast organised by Indirect Taxes Committee of ICAI
07th July, 2018
By
CA Chitresh Gupta
B.Com(H), FCA, IDT(Cert), IFRS(Cert)
Time of Supply - Need
Supply –Key
Parameters
Rate of Tax
Value of Supply
Person Liable to
pay the tax
Point of payment of
Tax (TOS)
Time of supply states
when the liability to pay
the tax would arise
Incorrect determination of
time of supply may attract
interest & other Penal
provisions
© Indirect Taxes Committee, ICAI 2
Time of Supply – Statutory Provisions
Time of Supply
Goods [Sec 12]
General Provision-Forward charge
cases
Reverse Charge Mechanism cases
Cases of Supply of Vouchers
Residuary cases
Addition in value on account of
Interest, Penalty etc
Services [Sec 13]
3© Indirect Taxes Committee, ICAI
Time of Supply of Goods
(Earliest of Following)
Date of Issue of Invoice or
Last date on which invoice is required to be issued [sec 31]
Date of Receipt of Payment
Earlier of the two -Date on which Payment in entered in books of
Account or -payment credited in the Bank account
• Where the Supplier receives an amount up to Rs 1,000 in excess of amount indicated in the tax Invoice.
At the Option of the Supplier - Time of supply is Date of
issue of invoice
Time of Supply of Goods – Sec 12(2)
4© Indirect Taxes Committee, ICAI
Time of Supply of Goods- Point of Discussion
• Earlier Advance received in case of Supply of goods were taxable under GST
• Notification no 40/2017-CT dated 13.10.2017 exempted small assessee having aggregate turnover upto
1.50 crores from the above provision
• Notification no. 66/2017-CT dated 15.11.2017 notifies that supplier of goods not liable to pay GST on
advance received for supply of goods
Taxability of Advance in case of Supply of Goods- Varying Tax Treatments during FY 2017-18
Period
Taxability of Consideration received in Advance
Aggregate Turnover less than INR 1.5 cr
Aggregate Turnover less than INR 1.5 cr
Before 01.07.2017 Not Taxable Not Taxable
01.07.2017 to 12.10.2017 Taxable Taxable
13.10.2017 to 14.11.2017 Not Taxable Taxable
15.11.2017 onwardsNot Taxable
Not Taxable
5© Indirect Taxes Committee, ICAI
• As per section 143(3)/(4),
• where the inputs/ Capital Goods sent for job-work are not received back
• by the “principal” after completion of job-work or otherwise or are not supplied
• from the place of business of the job worker as aforesaid within a period of one/three years
• of their being sent out,
• it shall be deemed that such inputs had been supplied by the principal to the job-worker on the day when the said inputs were sent out.
Taxability in case of Non Receipt of Input/ Capital Goods from the place of job worker
Time of Supply of Goods- Point of Discussion
Hence, it may be noted that time of supply in such case will be the date on which said inputs were sent to job worker. The principle will be liable to pay Interest thereon
Further, it may be possible that Job worker may not be able to claim credit on account of • Expiry of the period for availment of ITC as per Sec 16(4).
6© Indirect Taxes Committee, ICAI
Goods sent by Supplier Directly to Job worker on 20th Jan ,2018
Manufacturer
Sends Delivery Challan on 20th Jan 2018 and avail ITC on such goods
Goods are not received till 19th Jan 2019 by Manufacturer
Time of Supply of Goods- Point of Discussion
Taxability in case of Non Receipt of Input/ Capital Goods from the place of job worker
It will be deemed as Supply of goods to JW on 20th Jan,2018. Manufacturer will• Issue Tax Invoice from 20th Jan,2018• Pay Resultant Tax & Interest accordingly
Cannot Claim ITC • Period for claiming ITC as per 16(4) was till 20th Oct,2018
Job worker
Supplier
7© Indirect Taxes Committee, ICAI
Time of supply in case of Price Escalation
Time of Supply of Goods- Point of Discussion
• Section 34(3) of CGST Act, where the value of goods reflected in the invoice is less than taxable value, the supplier can raise a debit note for the differential amount.
• Section 34(4) of CGST Act states that the person who issues a debit note in relation to a supply of goods orservices or both shall declare the details of such debit note in the return for the month during which such debitnote has been issued and the tax liability shall be adjusted in such manner as may be prescribed.
• No clarity on the time of supply for the purpose of paying GST on the differential amount.
• View # 1 – The time of supply will be as per the date of original invoice
• View # 2 – The time of supply to be determined as per section 12(5)(a) –residuary provision - as no invoice is raised therefore, the section 12(2) does not apply. Time of supply to be date of filing of return.
Recovery of interest on account of price escalation referred to Larger Bench of Supreme Court in Steel Authority of
India Ltd. vs. Commissioner of C. Ex., Raipur, 2015 (326) E.L.T. 450 (S.C.)
8© Indirect Taxes Committee, ICAI
Time of Supply of Goods in case of RCM
(Earliest of Following)
Date of Receipt of Goods
Date on which Payment is made
Date immediately following 30 days from the Date of issue of
invoice by the supplier
Where it is not possible to determine the time of supply under above clauses then time of supply shall be the DATE OF ENTRY IN THE BOOKS OF ACCOUNT OF THE RECIPIENT OF SUPPLY
Time of Supply of Goods- Reverse Charge
Period of Receipt of Goods Sec 9(3)-RCM in case of Specified goods Sec 9(4)- RCM in case of Inward supply from URD
Before 01.07.2017 Not Taxable Not Taxable
01.07.2017 to 13.10.2017 Taxable Taxable
13.10.2017 onwards Taxable Non Taxable
GIT as on 31st March,2018May be taxable - residual provision but ITC could not
be availed due to non receipt of goodsNot Taxable
9© Indirect Taxes Committee, ICAI
Time of Supply of Goods- Vouchers
Time of Supply
(in case supply of Vouchers)
If Supply is Identifiable
Date of issue of Voucher
All other caseDate of
Redemption of Voucher
Sec 2(118)“voucher” means
• an instrument where there is an obligation to accept it
• as consideration or part consideration for
• a supply of goods or services or both and
• where the goods or services or both to be supplied or the identities of their potential suppliers are either
• indicated on the instrument itself or in related documentation, including the terms and conditions of use
of such instrument;
10© Indirect Taxes Committee, ICAI
Time of Supply of Goods- VouchersIllustration Nature of Instrument Voucher or Not
Gift Card from HDFC Bank/Sodexo Coupons for Rs 5000
It is money by way of stored value even if not encashable
Not Voucher
Coupon given to customer by Vijay Sales which allows discount of 10% on next purchase
It is a future discount by way of ‘Value to use’ not encashable
Not Voucher
Money deposited in Paytm Wallet It is money by way of stored Value though encashable Not Voucher
Cashback provided by Paytm on specified purchase
It is a future discount by way of ‘Value to use’ not encashable
Not Voucher
Prepaid Instruments: Telephone Calling card Multi-Currency Traveller’s card DTH Recharge card
It is money received in advance to be settled by making supplies in future
Not Voucher
Card given by PVR in return of Loyalty points/ consideration which allows viewing of movies for specified period without any further charge
It is an instrument with Obligation Voucher
11
Time of Supply of Goods- Interest, Penalty etc
12
Time of Supply
Addition in the value of supply by way of interest, late fee or penalty for delayed payment
of any consideration
Date on which the supplier receives such addition in
value.
What will be the Time of Supply in case of Liquidated Damages/ Forfeiture of Security Deposit/ Penalty on account of Issues relating to Quality or Due to Non Completion of work on time
© Indirect Taxes Committee, ICAI
Time of Supply of Goods- Residuary provision
Time Of Supply
(when Not Possible to Determine Time of Supply)
If Periodical Return has to be filed
Date on which such return is to be filed
Any other CaseDate on Which
CGST/SGST is paid
13© Indirect Taxes Committee, ICAI
Time of Supply of Goods- Audit Issues
Time of supply (verification of compliance with Section 12, 13 and 14 of the Act)- GSTR-9D (Proposed Format)
1Specify instances where tax has not been paid in accordance with Section 12 / 13 read with Section 31 of the CGST Act, 2017
2Whether there was a change in rate of tax on the goods or services or both supplied during the year? Provide details where the effect of the change has not been provided. - Issue of Non Taxability of Advance to be taken care
3Details of supply of services where the supply ceased prior to completion, and no tax has been discharged thereon.
4Details of supply of goods on ‘sale on approval basis’ exceeding the time limit of 6 months and not offered to tax.
14© Indirect Taxes Committee, ICAI
15© Indirect Taxes Committee, ICAI
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