OBJECTIVE Goods and Services Tax (GST) is an Indirect Tax levied in India introduced in July, 2017 which was one of the most important reforms in the Indian Economy. GST is payable on the supply of goods or services. In this webinar, we will be able to understand and analyse the provisions related to time and value of supply under GST.

1. Time and Value of
Supply under GST
CA Jugal Gala

2. 2
Credits and Acknowledgments
Harish Kumar R

3. Legends used in the Presentation
3
CBIC Central Board of Indirect Taxes and Customs
CGST Central Goods and Services Tax
GAAP Generally Accepted Accounting Principles
GST Goods and Services Tax
IGST Integrated Goods and Services Tax
ITC Input Tax Credit
SGST State Goods and Services Tax
UTGST Union Territory Goods and Service Tax

4. Presentation Schema
4
Introduction
Time of Supply of
Goods
Time of Supply of
Services
Change in Rate of Tax in
Respect of Supply
Exclusion of Discounts
from Value
Rules for Valuation of
Supply

5. Introduction
5
GST is payable on supply of goods or services
CGST Act provides for the time of supply of goods and services under Sec 12 and 13
respectively
Value of the supply is determined as per the Sec 15 and the rules made thereunder

6. Time of Supply of Goods – Sec 12
6
Sec 12 provides for the determination of time of supply in the following situations:
Supply of goods where
supplier is liable to pay
tax
Supply of goods that are
taxable under reverse
charge
Supply of vouchers that
can be used to pay for
goods
Residual cases
Addition to value of
supply of goods by way of
interest or late fee or
penalty for delayed
payment

7. Supply of Goods where Supplier is Liable
to Pay Tax
7
This is a case of forward charge, the time of supply of goods that are taxable is the earlier of the following 2 dates:
(i) Date of issue of invoice by the supplier or the last date on which the
invoice ought to have been issued in terms of Sec 31, to the extent the
invoice covers the supply of goods; or
(ii) Date of receipt of payment by the supplier, to the extent the payment
covers the supply of goods
As per Notification No. 66/2017 CT dated 15.11.2017, a registered person (excluding composition supplier)
should pay GST on the date of issue of invoice or the last date on which invoice ought to have been issued
As the notification exempts point (ii) above stated, taxpayers (excluding composition supplier) are not
required to collect GST at the time of receipt of advance in relation to supply of goods

8. Time Limit for Issuance of Invoice for
Supply of Goods – Sec 31
8
The invoice needs to be issued either before or at the time of removal of goods (where supply involves
movement of goods) or delivery of goods/ making goods available to recipient (in any other case)
In case of continuous supply (periodic supply and receipt of payments, say monthly) of goods, the
invoice should be issued before or at the time of issuance of periodical statement/receipt of
periodical payment
In case of goods sent or taken on approval for sale or return, invoice should be issued before or at the
time of supply or 6 months from the date of removal, whichever is earlier

9. Illustration for Determining Time of Supply
9
A machine worth Rs. 10 lakhs has to be supplied at site. It is done by sourcing various components
from vendors and assembling the machine at site. The details of the various events are:
10th March Purchase order with advance of Rs. 75,000 is
received and entry duly made in the seller’s books of
account
15th April The machine is assembled, tested at site, and
accepted by buyer
23rd April Invoice raised
5th May Balance payment of Rs. 9,25,000 received
Registered person (excluding composition supplier) has to pay GST on the outward supply of goods at the time
of supply i.e. the date of issue of invoice or the last date on which invoice ought to have been issued
Therefore, the time of supply for the purpose of payment of tax shall be on 15th April as the goods were made
available to the recipient on the said date (the last date on which invoice ought to have been issued)

10. Supply of Goods that are Taxable under
Reverse Charge
10
The time of supply of goods on which GST is payable on reverse charge basis are as follows:
The time of supply for such goods will be the earliest of the following dates
Date on which the goods are received, or
Date on which payment is recorded in the books of account of the recipient, or the
date on which the same is debited in his bank account, whichever is earlier, or
Date immediately following 30 days from the date of issue of invoice (or document
by some other name in lieu of invoice) by the supplier
If it is not possible to determine the time of supply by using the above parameters, then the time of
supply will be the date of entry of goods in the books of account of the recipient of supply

11. Vouchers and Residual Cases
11
The time of supply of vouchers exchangeable for goods is
Date of issue of the voucher, if the supply that it covers is identifiable at that point, or
Date of redemption of the voucher in other cases
Residual Cases
If the time of supply is not determinable in the aforesaid methods then, it shall be determined in the following manner:
Due date for filing of the periodical return, or
In any other case (say if the returns are filed after the due date), date on which GST is paid
-Voucher means an instrument where there is an obligation to accept it as consideration or part
consideration for a supply of goods or services or both and
-where the goods or services or both to be supplied or the identities of their potential suppliers
are either indicated on the instrument itself or in related documentation, including the terms and
conditions of use of such instrument

12. Enhancement in Value on Account of
Interest/Late Fee etc. for Delayed Payment
of Consideration
12
Where in any contract, payment beyond stipulated time
attracts interest/ late fees etc., such interest/ late fees are
includible in value of taxable supply

13. Time of Supply of Services – Sec 13
Supply of service where supplier is liable to pay tax
Date of invoice or date of receipt of payment (to the extent the invoice or payment covers the supply of
services), whichever is earlier, if the invoice is issued within the time
Date of provision of service or date of receipt of payment (to the extent the payment covers the supply
of services), whichever is earlier, if the invoice is not issued within the time
If the above methods are not applicable, the time of supply will be the date on which the
recipient of service shows receipt of the service in his books of account

14. Time Limit for Issuance of Invoice for
Supply of Services
The tax invoice needs to be issued either before the provision of service or within 30 days (45 days in case of
insurance companies/ banking companies/ financial institutions including NBFCs) from the date of supply of service
In case of insurance companies/ banking companies/ financial institutions including NBFCs/ telecom companies
making taxable supplies between distinct persons (where a person has obtained more than one registration e.g.
branch of a bank), invoice may be issued before or at the time of recording such supply in the books of account or
before the expiry of the quarter during which the supply was made
In case of continuous supply of services, the invoice should be issued either (i) on/ before the due date of payment
or (ii) before/ at the time when the supplier of service receives the payment, if the due date of payment is not
known or (iii) on/ before the date of completion of the milestone event when the payment is linked to completion
of an event
In case of cessation of supply of services before completion of supply, the invoice (to the extent of the supply made
before such cessation) should be issued at the time when the supply ceases

15. Receipt of Services that are Taxable
under Reverse Charge
The time of supply for such service will be the earlier of the following
Date of payment, or
Date immediately following 60 days since issue of invoice (or
any other document in lieu of invoice) by the supplier
If it is not possible to determine the time of supply by using the above parameters, then the time of
supply will be the date of entry of the service in the books of account of the recipient of supply

16. Vouchers and Residual Cases
16
Vouchers
The time of supply of vouchers that are exchangeable for services is stipulated as the date of issue of the
voucher, if the supply is identifiable at that point, or the date of redemption of the voucher in other cases
Residual Cases
When the aforesaid situations are could not be applied then the following manner shall be applicable:
Date on which periodical return for the period is required to be filed, or
In any other case, date on which GST is paid

17. Change in Rate of Tax in Respect of Supply
of Goods or Services – Sec 14
In case of change in rate of tax, the following manner is considered:
if issue of invoice and receipt of payment are both before the change in rate, the time of supply is the date of
the earlier of these 2 events;
if supply and issue of invoice are before the change in rate, the date of issue of invoice is the time of
supply;
if supply and receipt of payment are before the change in rate, the date of receipt of payment is the
time of supply
if supply and receipt of payment are after the change in rate, the date of receipt of payment is the time
of supply;
if issue of invoice and receipt of payment are after the change in rate, the date of the earlier of these 2
events is the time of supply;
If supply and issue of invoice are after the change in rate, the date of issue of invoice is the time of supply

18. Value of Supply
Sec 15

19. Supplies to Unrelated Persons where Price is
the Sole Consideration
between 2 persons who are not related to each other, and
price is the sole consideration for the supply,
the value of the supply is the transaction value (the price
actually paid or payable)
Transaction Value

20. Contd. Inclusions in value
Taxes, duties, cesses, fees and charges other than CGST, SGST, UTGST, GST Compensation Cess, if charged
separately
Any amount that the supplier is liable to pay in relation to supply but which has been incurred by the
recipient of the supply and not already included in the price (eg: transportation cost incurred by recipient)
Incidental expenses, such as, commission and packing, charged by the supplier to the recipient of a
supply
Any amount charged for anything done by the supplier in respect of the supply of goods and/or services
at the time of, or before delivery of goods /supply of services
Interest or late fee or penalty for delayed payment of consideration
Subsidies, directly linked to the price, other than subsidies given by the State or Central Governments
The value of supply includes the following:

21. Related Persons
Persons shall be deemed to be “related persons’’ if only
they are officers or directors of one another’s businesses
they are legally recognized partners in business
they are employer and employee
any person directly or indirectly owns, controls or holds 25% or more of the
outstanding voting stock or shares of both of them
one of them directly or indirectly controls the other
both of them are directly or indirectly controlled by a third person
together they directly or indirectly control a third person or they are members of the same
family

22. Exclusion of Discounts from Value
Discounts that are allowed as deduction from the value are as follows:
(i) Discounts given before or at the time of supply and shown in the invoice
(ii) Post supply discounts are allowed if the following 2 conditions are
satisfied
Discount is in terms of an agreement that existed at the time of supply and can be
worked out invoice-wise; and
Proportionate ITC is reversed by the recipient - When a credit note is issued to recipient
by the supplier for the discount, the buyer shall reverse the proportionate credit
e.g. 1. Britannia gives a discount of 10% on the list price of its distributors. Thus for a carton of its biscuits, in the invoice the
list price is mentioned as Rs. 500, on which the discount of 10% is given to arrive at the final price of Rs. 450. The value for
supply shall be Rs. 450, as the discount is allowed at the time of supply and shown in the invoice.
2. A company announces turnover discounts after reviewing the dealer performance during the year. The discounts are based
in the performance slabs and are given as cash-backs. As these discounts were unknown at the time of supply, they will not be
deducted from the value of those goods.

23. Determination of Value in Specified
Scenarios and Notified Supplies
If the transaction is with a related party, and/or price is not the sole consideration for the supply of
goods / services, then the value will be determined as per the rules prescribed
In respect of certain notified supplies also, the value will be determined in the manner as stipulated in
the rules for valuation, the notified supplies are as follows:
the service of purchase or
sale of foreign currency
including money changing
the service of booking air
tickets by an air travel
agent
life insurance service
buying and selling of
second hand goods
vouchers, token, coupons
or stamps (other than
postage stamps)
redeemable against goods
or services
services provided without
consideration between
distinct persons under GST
laws that are different
units of the same legal
entity
supply in case of lottery,
betting, gambling and
horse racing

24. Rules for Valuation of Supply of Goods
and/ or Services

25. Value of Supply where the Consideration is
Not Wholly in Money – Rule 27
The Supply is valued by the following methods:
The open market value of such supply
If open market value of the supply is not known, the consideration in money plus the money
equivalent of the non-money consideration, if such amount is known at the time of supply
If the value cannot be determined under the previous 2 methods, the value of supply of goods
and/or services of like kind and quality (same or closely or substantially resembles)
Residual method – If the other methods are not applicable, the consideration in money plus the
money equivalent of the non-money consideration, as worked out based on cost of the supply plus
10% mark-up or by other reasonable means
Open market value means the full value of money excluding taxes under GST laws where such
supply is between unrelated persons and price is the sole consideration for such supply
Note the above methods shall be followed chronologically

26. Value of Supply between Distinct or Related
Persons, Other Than Through an Agent – Rule 28
The methods of valuation of transactions between related persons and
between distinct persons, are as follows:
the open market value of such supply
if open market value is not available, the value of supply of goods or services of like kind and
quality
if value cannot be determined under the above methods, it must be worked out based on the cost of
the supply plus 10% mark-up or by other reasonable means
Where the goods are intended for further supply as such by the recipient, the
value shall, at the option of the supplier, be an amount equivalent to 90% of the
price charged for the supply of goods of like kind and quality by the recipient to
his customer not being a related person
Note the above methods shall be followed chronologically

27. Value of Supply of Goods or Received
Through an Agent – Rule 29
Supply is valued by following methods:
Open market value of goods being supplied or 90% of the price charged for the
supply of goods of like kind and quality by the recipient to his unrelated customer
Value shall be cost of supply plus 10% mark-up
Value of supply determined by using reasonable means
Note the above methods shall be followed chronologically
Value of Supply of Goods or Services or both Based on Cost – Rule 30
If the value of a supply of goods and/or services cannot be worked out by the aforesaid
methods, its value will be 110% of the cost of production/ manufacture/acquisition of
such goods or cost of provision of such services

28. Residual Method for Determination of
Value of Supply – Rule 31
The supplier of goods needs to sequentially follow Rules 27 to 30 before valuing
goods as per this residual Rule 31
Service providers, however, have the option of valuing services as per Rule 30 or Rule
31 after sequentially following Rules 27 to 29
The residual method shall be determined by using reasonable means

29. Value of Supply in case of Lottery, Betting,
Gambling and Horse Racing – Rule 31A
Rule 31A shall be applied in the following cases:
Supply Value
Supply of lottery run by State Governments Higher of the two amounts to be deemed as
the value
-100/112 of the face value of ticket or
-100/112 of the price as notified in the Official
Gazette by the organising State
Supply of lottery authorised by State
Governments
Higher of the two amounts to be deemed as
the value
-100/128 of the face value of ticket or
-100/128 of the price as notified in the Official
Gazette by the organising State
Supply of actionable claim in the form of
chance to win in betting, gambling or horse
racing in a race club
100% of the face value of the bet or the
amount paid into the totalizator (device
showing the number and amount of bets)

30. Determination of Value in respect of
Certain Supplies – Rule 32
Special provision relating to determination of value of service of purchase or sale
of foreign currency including money changing
The value of service in relation to purchase or sale of foreign currency, including money changing, is
determined by either of the 2 methods:
Method 1
Case 1: Transaction where one of the currencies exchanged is Indian Rupees
The value of supply is difference between buying rate or selling rate of
currency and RBI reference rate for that currency at the time of exchange
multiplied by total units of foreign currency
Case 2: Transaction where neither of the currencies exchanged is Indian Rupees
The value of supply is 1% of the lesser of the 2 amounts the person
changing the money would have received by converting (at RBI
reference rate) both of the 2 currencies in Indian Rupees

31. Contd.
Method 2
The person supplying the service may exercise the following option to ascertain the value of service, however,
once opted he cannot withdraw it during the remaining part of the financial year:
Currency exchanged Value of Supply
Upto Rs. 1 lakh 1% of the gross amount of currency
exchanged
or Rs. 250, whichever is higher
Exceeding Rs. 1 lakh and upto Rs. 10 lakhs Rs. 1,000 + 0.50% of the (gross amount of
currency exchanged less Rs. 1,00,000)
Exceeding Rs. 10 lakhs Rs. 5,500 + 0.1% of the (gross amount of
currency exchanged less Rs. 10,00,000) or
Rs. 60,000,
whichever is lower

32. Rate of Exchange of Currency, other than
Indian Rupees, For Determination of Value –
Rule 34
32
Goods: The relevant rate of exchange for determining the value of taxable goods is the
rate notified by CBIC prevalent on the date of time of supply of said goods
Services: The relevant rate of exchange for determining the value of taxable service is
the rate determined as per GAAP, prevalent on the date of time of supply of said service

33. Special Provision for Specified Supplies
Value of service of booking of tickets for air travel by an air travel agent is 5% of basic fare in case
of domestic travel and 10% of basic fare in case of international travel
Special provision relating to determination of value of service in relation to life insurance business
Policy with dual benefits of
risk coverage and investment
Taxable value = Gross premium charged less amount allocated for
investments/savings if such allocation is intimated to the policy holder
at the time of collection of premium
Single premium annuity
policy
Taxable value = 10% of the single premium charged from the policy
holder where allocation for investments/savings is not intimated to
the policy holder
Other cases Taxable value = 25% of premium charged from the policy holder in the
1st year and 12.5% of premium charged for subsequent years
Policy only with risk Taxable value = Entire premium charged from the policy holder

34. Contd.
34
Special provision relating to determination of value of second hand goods – Margin Scheme
A person dealing in second hand goods may be allowed to pay tax on the margin i.e., the difference
between the value at which the goods are supplied and the price at which the goods are purchased
If there is no margin, no GST is charged for such supply
Special provisions relating to determination of value of redeemable
vouchers/stamps/coupons/tokens
The value of a token, voucher or coupon, or a stamp (other than postage stamp) which is
redeemable against a supply of goods and/or services is equal to the money value of the goods
and/or services redeemable against such token, voucher, coupon or stamp

35. Value of Supply in case of Pure Agent
35
enters into a contractual agreement with the recipient of supply to act as his pure
agent to incur expenditure or costs in the course of supply of goods or services or both;
neither intends to hold nor holds any title to the goods or services or both so
procured or supplied as pure agent of the recipient of supply;
does not use for his own interest such goods or services so procured; and
receives only the actual amount incurred to procure such goods or services in addition
to the amount received for supply he provides on his own account
Pure Agent means a person who

36. Determination of Value of Supply of
Services – Rule 33
36
The expenditure or costs incurred by a supplier as a pure agent of the recipient of supply shall
be excluded from the value of supply, if all the following conditions are satisfied
the supplier acts as a pure agent of the recipient of the supply, when he makes the
payment to the third party on authorisation by such recipient
the payment made by the pure agent on behalf of the recipient of supply has been
separately indicated in the invoice issued by the pure agent to the recipient of service; and
the supplies procured by the pure agent from the third party as a pure agent of the
recipient of supply are in addition to the services he supplies on his own account

37. Illustration
37
Illustration.- Corporate services firm A is engaged to handle the legal work pertaining to the
incorporation of Company B. Other than its service fees, A also recovers from B, registration fee
and approval fee for the name of the company paid to the Registrar of Companies. The fees
charged by the Registrar of Companies for the registration and approval of the name are
compulsorily levied on B. A is merely acting as a pure agent in the payment of those fees.
Therefore, A’s recovery of such expenses is a mere reimbursement and shall not part of the value
of supply made by A to B.

38. Thank You!
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