RKT Caretakers, a registered person, provides the services of repair and maintenance of electrical appliances. On April 1, it has entered into an…

CA Intermediate · Taxation · MTP · September 2025
RKT Caretakers, a registered person, provides the services of repair and maintenance of electrical appliances. On April 1, it has entered into an annual maintenance contract with P for its Air Conditioner and Washing Machine. As per the terms of contract, maintenance services will be provided on the first day of each quarter of the relevant financial year and payment for the same will also be due on the date on which service is rendered. During the year, it provided the services on April 1, July 1, October 1, and January 1 in accordance with the terms of contract. When should RKT Caretakers issue the invoice for the services rendered?

Suggested Answer and Working Notes:

Continuous supply of service means, inter alia, supply of any service which is provided, or agreed to be provided continuously or on recurrent basis, under a contract, for a period exceeding 3 months with the periodic payment obligations. Therefore, the given situation is a case of continuous supply of service as repair and maintenance services have been provided by RKT Caretakers on a quarterly basis, under a contract, for a period of one year with the obligation for quarterly payment. In case of continuous supply of service, where due date of payment is ascertainable from the contract (as in the given case), invoice shall be issued on or before the due date of payment. Therefore, in the given case, RKT Caretakers should issue quarterly invoices on or before April 1, July 1, October 1, and January 1.

Topics: Paper 3A: Income Tax Laws, Paper 3B: Goods and Services Tax

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