Page 5 - Chapter 5 TOS

Discussion & Conclusion:
Ü In the given case, monthly payments of ₹ 2 lakh are received, Therefore, invoices should be issued for ₹ 2
lakh each on or before August 5 & September 5
Ü Further, invoice should also be issued for differential payment of ₹ 2,56,000 on or before October 3, when
statement of account is issued
Ü Thus, TOS of goods worth ₹ 2,00,000 is August 5 and September 5 & goods worth ₹ 2,56,000 is October 3

03: Goods sent on Sale on Approved or Return Basis

From the following Information determine time of supply, if goods are supplied on approval basis:
Q.3
Sr.No. Sale as approval or return Basis Removal Issue of A c c e p t e d Receipt of
of Goods Invoice by recipient Payment
1. Acceptance Communicated Within 6 month 01/11/XX 25/11/XX 15/11/XX 25/11/XX
of Removal

2. Amt. paid to Supplier before informing 01/11/XX 25/11/XX 15/11/XX 12/11/XX
acceptance

3. Acceptance Not Communicated Within 6 01/10/XX 15/05/XY 15/05/XY 02/05/XY
month of Removal

Answer:
Legal Provision:
Ü As per section 12(2) read with section 31(7) of CGST Act, 2017, the time of supply for goods sent for
approval shall be earlier of:-
Ø Date of issue of invoice or
Ø Time when it becomes known that supply has taken place or
Ø Expiry of Six months from the date of removal.

S r. Sale as approval or return Removal Issue of A c c e p t e d Receipt of Time of
No. Basis of Goods Invoice by recipient Payment Supply
1. Acceptance Communicated 01/11/XX 25/11/XX 15/11/XX 25/11/XX 15/11/XX
Within 6 month of Removal
2. Amt. paid to Supplier before 01/11/XX 15/11/XX(read with
informing acceptance 25/11/XX 15/11/XX 12/11/XX N/n 66/2017)
3. Acceptance Not Communicated 01/04/XY (i.e. 6
01/10/XX 15/05/XY 15/05/XY 02/05/XY
Within 6 month of Removal month from Removal)

04: Proviso to Sec 12(2):- TOS of Goods for excess amount received upto Rs 1000

Q.3
What is the time of supply with respect to amount received in excess of the invoice amount for supply of
Q.4
goods in the following case:-
Invoice is issued for ₹ 5,000 on August 22, 20XX by the supplier. Subsequently, the recipient pays:-
Scenario 1: ₹ 5,500/-
Scenario 2: ₹ 8,000/-

For scenario 2:- Date on which payment is entered in books of accounts of the supplier is Aug 30, 20XX & date
on which payment is credited to his bank account is Aug 28, 20XX.
For excess amount, invoice is issued on September 22, 20XX in both the cases.

V’Smart Academy 5.03 CA Vishal Bhattad 09850850800