Page 14 - Chapter 5 TOS

Q.13
Mint Industries Ltd., a registered supplier, imports business support services from Green Inc. of
USA on 13th August. The relevant invoice for $ 1,20,000 is raised by Green Inc on 18th August. Mint
Industries Ltd. makes the payment on 22nd September. Based on the above information, answer the
following questions?
1. Determine the Time of Supply??
2. Determine the TOS if Mint Industries Ltd. issues self-invoice on 12th September.
Answer:- Legal Provision:
Ü If services are supplied by any person located in a non-taxable territory to any person located in taxable
territory other than non-taxable online recipient, GST is payable under reverse charge by the person located in
the taxable territory. [Sec 9(3)]
Ü If supply of services is liable under reverse charge, then time of supply of services shall be the earliest of the
following dates: [Sec 13(3)]
a) Date of payment by recipient (i.e., earlier of book entry or debit to bank)
b) 61st day from supplier's invoice, in cases where invoice is required to be issued by the supplier or
c) Date of issue of invoice by the Recipient, in cases where invoice (Self Invoice) is to be issued by the recipient.
Discussion & Conclusion : In the given case, business support services are provided by Green Inc (located in non-
taxable territory) to Mint Ltd. (person other than non-taxable online recipient and located in taxable territory), tax is
payable under reverse charge by Mint Ltd.

1) Ü In the given case, Time of supply is the earliest of:
Ø Date of payment = 22nd September
Ø 61st day from invoice date = 18th August + 61 days = 18th October
Ø Date of self-invoice by recipient (if any) = Not mentioned here
Ü Since no self-invoice is issued, Thus, Time of Supply will be 22nd September.

2) Ü If Mint Industries issues a self-invoice, then TOS is earliest of:
Ø Date of payment = 22nd September
Ø 61st day from supplier's invoice =18th August + 61 days = 18th October

Ø Date of self-invoice = th September 12
Ü Therefore, Time of Supply will be 12th September.

Q.14
Kothari Ltd., Mumbai, holds 51% of shares of Wilson Inc., a USA based company. Wilson Inc.
provides business auxiliary services to Kothari Ltd. From the following details, determine the time of supply
of service provided by Wilson Inc: [Study Mat] [CA Final MTP Sep 23]
Agreed consideration US $ 1,00,000

Date on which invoice is issued by Wilson Inc 16th June
Date on which invoice is issued by Wilson Inc 19th August
Date of debit in the books of account of Kothari Ltd 30th September
Date on which payment is made by Kothari Ltd. 23rd December

Answer:- Legal Provision:
Ü As per 2nd proviso to section 13(3) of CGST Act 2017, in case of supply by associated enterprises, where the
supplier of service is located outside India, the time of supply is the earlier of:
Ø Date of entry in the books of account of the recipient of supply
Ø Date of payment
Discussion & Conclusion:
Ü In the given case, Since Kothari Ltd. holds 51% shares of Wilson Inc., Kothari Ltd. and Wilson Inc. are
'associated enterprises' as per section 92A of the Income-tax Act, 1961.
Ü Thus, Time of supply is 30th September (ie earlier of 30th September or 23rd December)

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