EXAMPLE-73

Mohit Ltd  transferred the copyright of printing of  books to Kumar Book Ltd.  by agreement, which provided consideration fixed @ Rs 80 per book sold by Kumar Book Ltd. The No. of books sold by Kumar Book Ltd in different FY as well as payment and invoice relating details are given in below table:-

(a)                Determine whether the  transfer of copy right covered under supply in GST.

(b)               If yes, whether treated as supply of goods or services.

(c)                Determine time of supply.

Answer

(a)                Sec 7 of GST Act, supply of goods and/or services covers any activity such as sale, transfer, barter, exchange, license, rental, lease or disposal made or agreed to be made for consideration and for business. Scope of supply also includes temporary transfer.

(b)               Schedule II paragraph 5(c) also specifies that temporary transfer or permitting the use or enjoyment of any intellectual property right is deemed as supply of services. Thus temporary transfer of the copy right to Kumar Book Ltd is covered under supply of services under GST.

(c)                This kind of service covered under 'continuous supply of services' because the period of supply of service exceeds 3 months.  As per 31(5)(b), where the due date of payment is not ascertainable from the contract- the invoice shall be issued on or before each such time when the supplier of service receives the payment.

Thus, time of supply according to section 13 is ascertained as under;

(a)                As invoice is issued according to section 31(5) point of time is date of issue of invoice or payment (whichever is earlier ) i.e. 14.07.2016

(b)               As invoice is issued according to section 31(5) point of time is date of issue of invoice or payment (whichever is earlier ) i.e. 07.10.2017

(c)                As invoice is not issued according to section 31(5), provision of service is the payment received date. Thus point of time is date of payment 28.03.2018.