Page 15 - Chapter 5 TOS

09: Combined Questions on Section 12 & 13

Q.15
KLM Ltd., a publishing and printing house registered in Maharashtra, is engaged in supply of books,
letter cards, envelopes, guides and reference materials. The following information is provided by the
company:
Event Printing of Books Printing of envelopes
Date of entering into printing contract 16th March 20th March
Date of receipt of advance 20th March 25th March

Date of completion of printing 10th April 5th April
Date of issue of invoice 15th May 10th April
Date of removal of books and letter heads to Buyer 13th May 7th April

Date of receipt of balance payment 31st May 30th April
In respect of printing of books, content was supplied by the author. For printing of envelopes, the design and
logo were supplied by the buyer.
Determine the time of suppl(ies) for the purpose of payment of tax
[Study Mat] [CA Final July 21 Exam (Similar)] [CA Final MTP April 24]

Answer:- Legal Provision:
Ü CBIC clarifies that in case of books, where only content is supplied by the person who owns the usage rights to
the intangible inputs while the physical inputs including paper used for printing belong to the printer, supply of
printing [of the content supplied by recipient of supply] is the principal supply and therefore such supplies
would constitute supply of services
Ü CBIC further clarifies that in case of supply of printed envelopes, by the printer using its physical inputs
including paper to print the design, logo etc. supplied by the recipient of goods, predominant supply is supply of
goods and the supply of printing of the content is ancillary to the principal supply of goods and therefore, such
supplies would constitute supply of goods
Ü As per section 12(2) of CGST Act, 2017 read with notification 66/2017, the time of supply of goods shall be
earlier of the following dates:-
Ø Date of issue of invoice or
Ø last date to issue the invoice u/s 31
Ü As per section 31(1), the registered person is required to issue invoice before or at the time of delivery of goods
or making goods available to the recipient
Ü As per section 13(2)(a) of CGST Act, 2017, if invoice is not issued within the time prescribed u/s 31 (i.e. within
30 days) for supply of services, then the time of supply of such services shall be earlier of:-
Ø the date of receipt of payment or
Ø the date of provision of services

Discussion & Conclusion:
1) For Supply of goods:(Printing of Envelopes)

Ü The last date by which invoice have been issued is 7th April.
Ü Thus, the time of supply of envelop is 7th April.

2) For Supply of services: (Printing of Books)
Ü Since in the given case, invoice for the services is not issued within 30 days, the time of supply for the
advance received is 20th March [ie earlier of date of receipt of payment (20th March) or date of

provision of service (10th April)]
Ü However, the time of supply for the balance payment is 10th April [ie earlier of date of provision of
service (10th April) or date of receipt of payment (31st May)]

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