Determine the time of supply for the purpose of the payment of tax in each of the following independent transactions with explaining relevant…

CA Final · Indirect Tax Laws · PYQS · May 2026
Determine the time of supply for the purpose of the payment of tax in each of the following independent transactions with explaining relevant provisions under the CGST Act, 2017 in brief: (i) Cuteex Pvt. Ltd. is registered in the State of Karnataka under GST. It has taken a residential house for its Managing Director (MD) on rent from Mr. Rathi, also registered under GST in Karnataka. The invoice for rent for the month of August 2025 was issued on 31st July 2025 by Mr. Rathi. The due date for payment was 7th August 2025, but since the MD was on a business trip, payment was made online by IMPS system on 15th October 2025 but recorded in advance in the books of the accounts of the company on the 14th October 2025. The amount was credited in Mr. Rathi's bank account on 15th October, 2025. (2 Marks) (ii) Ziva Telecom Ltd. is a telecom operator providing mobile network services in India by securing the right to use spectrum from the Government of India as per the spectrum allocation model. As per the contract, the company has to make periodic payments over a period of 12 months in 12 installments to the Government. The due date for payment was 20th October 2025 and payment was made by the company on 19th October 2025 since it was a Sunday on 20th October 2025. Also discuss in brief the provision related to due date of issue of the invoice in the above case. (3 Marks)

Suggested Answer and Working Notes:

(i) Tax on renting of residential dwelling services is payable under reverse charge since they are being provided to a registered person (Cuteex Pvt. Ltd.) Time of supply is earliest of: (i) Date of recording payment in books of recipient-14th October 2025 (ii) Date of debit from bank account of recipient -15th October 2025 (iii) Date immediately following 60 days from issue of invoice (61st day from issue of invoice) - 30th September 2025 Accordingly, time of supply is 30th September 2025. (ii) Spectrum allocation services are 'continuous supply of services' since they are: provided continuouslyunder a contract for over 3 monthswith periodic payments. Since the due date of payment is clearly ascertainable from contract, the invoice must be issued on or before due date of payment, i.e., on or before 20th October 2025. Tax on said services provided by Government is payable under reverse charge. Thus, time of supply is as and when the payments are due or made, whichever is earlier, 19thOctober 2025.

Topics: Time of Supply

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