Kanhaiya Lal checked-in at the 'Royal Tourist Lodge' in Madurai on 15th March. The room rent for the same was 900 per day for a single room. She…

CA Final · Indirect Tax Laws · MTP · January 2026
Kanhaiya Lal checked-in at the 'Royal Tourist Lodge' in Madurai on 15th March. The room rent for the same was 900 per day for a single room. She checked-out on 17th of March, and payment in respect to the same was received by the lodge via cheque at the time of checking-out and entered in the books on the same date. The lodge decided to issue her the invoice on the same date when the amount would get credited in its bank account. The lodging of hotel rooms which was exempted upto 1,000 earlier became chargeable to tax from 18th March. Under the GST law, determine the time of supply and taxability of the service of lodging in the hands of 'Royal Tourist Lodge' if the cheque gets credited into the bank account of 'Royal Tourist Lodge' on 20th of March. Note: Assume that all the days covered in the above case are working days. (5 Marks)

Suggested Answer and Working Notes:

(a) In the given case, Date of receipt of payment is:- (a) Date of entry of payment in books of account [17th March] or (b) Date of credit of payment in bank account [20th March] whichever is earlier, viz., 17th March. Date of issue of invoice is 20th March (since lodge decided to issue invoice on date of credit of payment in its bank account.) Since in the given case of change in rate of tax (on 18th March): services have been supplied and payment has been received, before such change in ratebut invoice is issued after the change in rate, time of supply is date of receipt of payment, viz. 17th March. Since the service of lodging upto a value of 1,000 was exempted at the time of supply, no GST is payable in the given case.

Topics: Time of Supply

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