Detailed discussion on time and value of supply, download full ppt
Time of Supply
12(1) & 13(1) – What is the time of supply?
12(1) “The liability to pay tax on goods shall arise at the time of supply as determined in accordance with the provisions of this section”
13(1) “The liability to pay tax on services shall arise at the time of supply as determined in accordance with the provisions of this section”
Continuous supply of Goods & Services
Sec 2(32) – Characteristics of a continuous supply of goods:
1. Supply of goods should be on a continuous or recurrent basis
2. Invoice on a regular or periodic basis
3. Something contingent at the time of removal/movement that can be determined only upon arrival / even consumption.
Sec 2(33) – Characteristics of a continuous supply of Services:
- Supply of goods should be on a continuous or recurrent basis
2. Contract period > 3 months
3. Payment obligations should be periodical
Value of Supply: Valuation under GST
Valuation to be adopted is Transaction value – if:
1. Supplier and Recipient of Supply are not related AND
2. Price is sole consideration for the supply
Valuation to be adopted is according to the Rules – if:
1. Consideration not wholly in money – Rule 27
2. Supply made is between related persons (other than Principal Agent transactions) or distinct persons u/s 25(4) & 25(5) of CGST Act, 2017 – Rule 28
3. Supply made or received through an agent – Rule 29
4. Value not determinable under Rule 27, 28, 29 – Rule 30
5. Value not determinable under Rule 30 / Provider of services unable to determine value of services under Rule 27, 28, 29 – Rule 31
VALUATION AS PER RULES EVEN IF PRICE IS SOLE CONSIDERATION AND THE PARTIES ARE NOT RELATED?
Section 15(5): Notwithstanding anything contained in Section 15(1) or 15(4):
Value of supplies Notified by Govt. on council recommendations shall be determined in such manner as may be prescribed
Central Tax Notification no. 10/2017 dated 28th June 2017 notified the Valuation rules for Distinct persons
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