Time and Value of Supply

1. Time and Value of Supply CA.PREETY PARIK

2. Time of Supply- Time of Supply = Liability to pay Tax Time of Supply Payment Invoice Date of payment entered in Books of Account Date of receipt credited in Bank Statement Date of Issue of Invoice Due Date for Issue of Invoice – Sec 31

3. Date for Issue of Invoice - Sec.31

4. Date for Issue of Invoice - Sec.31

5. Time of Supply- • Goods Earlier of the Following:- • Date of issue of Invoice • Due Date for issue of invoice u/s 31 • Date of receipt entered received in Books of Account of Supplier • Date of Credit in Bank Statement of supplier.

6. Time of Supply- • Goods (Reverse charge Mechanism) Earlier of the Following:- • Date of receipt of Goods • Date following 30days from date of invoice/ any other document issued by the supplier • Date of payment made in Books of Account of recipient • Date of debit of payment in Bank Statement of recipient ------------------------------------------------------------------ If above not possible to determine TOS as above then:- Date of entry in Books of Account of the recipient of Supply

7. Time of Supply- • SERVICES (if invoice is issued within time limit = 30 days/ 45 days from provision of Service) Earlier of the Following:- • Date of issue of Invoice • Date of receipt entered in Books of Account of supplier • Date of credit of receipt in Bank Statement of supplier ---------------------------------------------------- If above not possible to determine TOS as above then:- Date of entry of receipt of services in Books of Account of the recipient of Supply

8. Time of Supply- • SERVICES (if invoice is not issued within time limitof 30 days/45 days from provision of Service) Earlier of the Following:- • Date of provision of service • Date of receipt entered in Books of Account of supplier • Date of credit of receipt in Bank Statement of supplier

9. Time of Supply- • Services (Reverse charge Mechanism) Earlier of the Following:- • Date following 60 days from date of invoice/ any other document issued by the supplier • Date of payment entered in Books of Account of recipient • Date of debit of payment in Bank Statement of recipient ------------------------------------------------------------------ If above not possible to determine TOS as above then:- Date of entry in Books of Account of the recipient of Supply

10. Time of Supply- • Import of Services between associated enterprises Supplier of services is located outside India TOS= Date of entry in Books of Account of recipient or date of payment, whichever is earlier • Import of Services after the appointed day Liable to Tax under GST even if Invoice has been received or payment has been made before the appointed day. If the Tax on such import has been paid in full under existing law, no GST. If tax has been paid in part, balance amount of Tax will be paid under GST

11. Time of Supply- • Goods or Services –By issue of Voucher • If Supply if identifiable – Date of Issue of Voucher Else • Date of Redemption of Voucher

12. Time of Supply- • Goods and Services • Supply deemed to made = to the Extent covered by Invoice or Payment. • In case of payment of upto Rs.1000, TOS= Date of Issue of Invoice, at the option of supplier • If TOS cannot be determined by any of the previous provisions (as covered by earlier slides) then:- TOS= Date on which return is to be filed or Date on which Tax is Paid

13. Time of Supply- • Goods or Services – • Addition in value of Supply on account of late payment of consideration for supply by way of interest, penalty, late fees = Date of receipt of such Value by the supplier

14. Time of Supply-

15. Time of Supply- There is change in Tax Rate, TOS will be as per the following:- • Goods or Services supplied before Change Payment Received= Date of payment entered in Books or credit in bank whichever is earlier. Receipt of bank =Credit in bank= after four working days from change in tax

16. Time of Supply- There is change in Tax Rate, TOS will be as per the following:- • Goods or Services supplied After Change Payment Received= Date of payment entered in Books or credit in bank whichever is earlier. Receipt of bank =Credit in bank= after four working days from change in tax

17. Value of Supply- • Supply of Goods or Services • Supplier and Recipient are not related • Price is sole consideration of Supply VALUE of Supply = Transaction Value (TV) TV= Price Actually paid or payable for supply

18. Value of Supply- Value of Supply Includes:- • Taxes, duties, cess, charges levied under any law other than GST, if charged by Supplier • Amount payable by supplier wrt supply but incurred/ paid by recipient and not included in TV • Incidental Expenses • Amount charged for anything done before/ at the time of supply • Interest/ late fees/ penalty for delayed payment of consideration for supply • Subsidies (other than Central/State Govt) linked to price.

19. Value of Supply- • DISCOUNT Value of Supply not to include - Discount given before or at the time of supply and recorded on invoice of supply. • Discount after the supply if a. It is as per agreement entered before/at time of supply b. It is specifically linked to relevant invoices c. ITC wrt discount (on basis of credit note issued by supplier) has been reversed by the recipient of supply.

20. Value of Supply- • Consideration is not Wholly in Money • Open Market Value (MV) • Sum of Money+ Money value of consideration not in money • Value of like kind and quality • Sum of Money + ( consideration not in money= 110% of cost of production/manufacture/acquisition) • Sum of money + (consideration not in money= residual method= reasonable means) # sequence to be followed

21. Value of Supply- • Open Market Value • Full Value in money excluding GST • Transaction between unrelated supplier and recipient • Price is consideration of supply • Supply is at same time when the supply being valued is made

22. Value of Supply- • Supply of like kind and quality • Supply in similar circumstances • Has characteristics, quality, quantity, functional components, materials and reputation • Resembles supply being valued

23. Value of Supply- • Supply between Related or Distinct Persons • Open Market Value If recipient is eligible for ITC, invoice value deemed to be open market value • Value of like kind and quality • 110% of cost of production/acquisition (in case of services, supplier may disregard 110% rule) • Residual Method # sequence to be followed

24. Value of Supply- • Supply between Principal and Agent • Open Market Value of supply or 90% of price charged by Agent to customer of like kind and quality (at option of supplier) • 110% of cost of production/acquisition (in case of services, supplier may disregard 110% rule) • Residual Method # sequence to be followed

25. Value of Supply- • Specific Services- Money Changing / purchase or Sale of Foreign Currency • (Buy Rate- Sale Rate) * No of units • 1% of amount of rupees received or paid • 1% Lesser of any currency receivable in rupees OR option • > Rs.1 Lacs = 1% of value of exchange, min Rs.250 • <1L >10L= ½% of (value of exchange -1L) + Rs.1000 • >10L= 1/10% of (Value of exchange- 10L) +Rs.5000

26. Value of Supply- • Specific Services- Booking of Tickets by Air Travel Agent for Travel by Air Domestic Travel= 5% of Basic Fare International Travel =10% Basic Fare Basic Fare = Part of Air Fare on which commission is paid to travel agent by Airline company

27. Value of Supply- • Specific Services- Life Insurance Business NA- entire premium paid for risk cover in life insurance • Gross Premium – allocated for investment (if intimated to policy holder at the TOS) • In case of single Annuity policy = 10% premium • In all other cases First Year= 25% premium Subsequent Years = 12.5% premium

28. Value of Supply- • Specific Goods- • Trading in Second hand goods Used goods as such including minor processing done that does not change nature of Goods • NO ITC taken on purchase VALUE = Selling Price- Purchase Price If –ve Value shall be ignored.

29. Value of Supply- • Specific Goods or Services- Supply against Voucher, Token, Coupon or Stamp Value= Money Value of Goods/ Services or both redeemable against such token, voucher, coupon or stamp. • Value of Taxable Service shall be deemed to be NIL Provided by class of Service providers – *between distinct persons As may be notified by the government on recommendation of council

30. Value of Supply- • Specific Services Supply of Services of Pure Agent Value of Supply shall exclude all cost of services incurred by the Agent on behalf of the principal *** subject to conditions CIF Agent at Bombay Principal at Aurangabad Custom Duty, port charges Exclude charges from valuation

31. Value of Supply- Supply of Services of Pure Agent Conditions:- • Contract is between third party and recipient • Recipient is liable to make payment to third party • Recipient authorizes the supplier to make payment on his behalf • Recipient knows the services shall be provided by third party • Payment made by supplier has been indicated in invoice issued by supplier • The supplier recovers only such amount paid to third party • Service procured by the supplier are in addition to supply he provides on his own account.