Page 4 - Chapter 5 TOS

01: Sec 12(2): TOS of Goods under Forward Charge read with N/no. 66/2017

Q.1
Chiku Traders is a registered supplier of plastic goods. On 10th April, 20XX, Chiku Traders received
an order from Neelu Traders for supply of a consignment of plastic goods. Chiku Traders gets the
consignment ready by 15th April, 20XX.
The invoice for the consignment was issued the next day, 15th April, 20XX. Neelu Traders collects the
consignment from the godown of Chiku Traders on 25th April, 20XX and hands over the cheque towards
payment on the same date. The said payment is entered in the books of accounts of Chiku Traders on 26th
April, 20XX and amount is credited in their bank account on 27th April, 20XX.
Determine the time of supply of the plastic goods supplied by Chiku Traders to Neelu Traders as per the
provisions of CGST Act, 2017. [CA Final Nov 18 Exam]
Answer:
Legal Provision:-
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:-
a) Date of issue of invoice or
b) last date to issue the invoice u/s 31.
Ü Further, u/s 31(1), if supply involves movement of goods, a registered person is required to issue a tax
invoice before or at the time of removal of goods for supply to the recipient
Discussion & Conclusion:-
Ü In this case, invoice is issued before the removal of goods (i.e. collection of goods by customer) & is thus,
within the time limit prescribed u/s 31(1).
Ü Therefore, the time of supply for payment of tax is date of issue of invoice, which is 16th April 20XX.

02: Continuous Supply of Goods
Q.2
Trust Industries Ltd. has entered into a contract with VST Ltd. to supply gas by a pipeline to VST Ltd.
for a period of one year. As per the terms of the contract-
i) VST Ltd. shall make monthly payments [Payment for a month shall be made by 7th day of the next month]
ii) Every quarter, Trust Industries Ltd. shall issue a statement of account showing the quantity and value of
goods dispatched, payments received and payment due.
iii) The differential amount, if any, as mentioned in the statement of account shall be paid by VST Ltd.
The details of various events are:
August 5, September 5,
Payments of ₹ 2 lakh made in each month for the quarter July - September
October 6
Statement of accounts for the quarter July - September issued by the supplier
October 3
showing amount of ₹ 2,56,000 as unpaid
Balance payment of ₹ 56,000 received by supplier for the quarter July -
October 17
September
Determine the time of supply of goods for the purpose of payment of tax. [Study mat]
Answer:
Legal Provision:
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:-
a) Date of issue of invoice or
b) last date to issue the invoice u/s 31.
Ü Further, As per section 31(4) of CGST Act, 2017, in case of continuous supply of goods which involves
successive statement of accounts or successive payments is:-
Ø the invoice is issued before or at the time of each such statement is issued or each such payment is received,
as the case may be

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