Table of Contents

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”

• Reference in Section 9 – Importance of Section 12 & Section 13

• Time of supply fixes the point when the liability to pay tax arises

• Use of the phrase ‘shall be’

• Not a fact to be inquired by a taxable person, but will of the legislature

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:

2. Contract period > 3 months

3. Payment obligations should be periodical

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

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