EXAMPLE-42

Mr. A placed order for supply worth Rs. 10 lakh. He has given advance of  Rs. 7 Lakh on 28 Aug 2017 and balance on actual supply in month of September. When will the incidence of tax arise?

 Answer

Supply deemed to have been to the extent of Rs. 7 Lakh on 28 Aug 2017 and balance 3 lakh on actual Supply in month of September.


Note: If the amount of advance has been received on or after 15.11.2017 then the time of supply of goods in respect of such amount shall be date of  issue of invoice Vide Notification No.66/2017-Central tax dt.15/11/2017.

So as per the above notification if the supplier receives advance in respect of supply of goods to be made in future,such sum shall be taxable for the month in which invoice relating to such amount will be issued or the last date of issue of invoice whichever is earlier,such notification is applicable from 15.11.2017 i.e advance received on or after 15.11.2017.