Goods and Services Tax – Started By: – Shyam Agarwal – Dated:- 11-12-2018 Last Replied Date:- 14-12-2018 – Sir, Mr.A providing Intermediary services to foreign company received an Advance on 02.09.18 for (50% advance) 500$ at ₹ 71/- & paid GST on ₹ 35,500/- Now Mr.A completed a provision on 31.10.18 & also raised invoice on 31.10.18 for 1000$ (for full value) & Rate of $ on 31.10.18 were ₹ 74/-.Now as on 31.10.18,whether Mr.A is liable for GST on ₹ 37,000/-(i.e on 500$ x ₹ 74/-) or on ₹ 38,500 (i.e.on difference between 1000$xRs.74/- Less: ₹ 35,500/-value taken at the time of Advance? – Reply By KASTURI SETHI – The Reply = On ₹ 37500/- tax is to be paid and not on ₹ 38,500/- as per Section 12 (2) of CGST Act. – Reply By Ganeshan Kalyani – The Reply = 12(2) The time of supply of goods shall be the earlier of the following dates, namely:- (a) the date of issue of invoice by the supplier or the last date on which he is req
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be the time of supply of services. (Date that is 31.10.2018) Receipt of advance is subject to supply of services. Service has been supplied on 31.10.18. Here you cannot adopt hybrid procedure. So correct rate exchange for payment of tax is ₹ 74/- for whole amount and not part amount (50%). Moreover, what is crucial is the invoice has been issued within 30 days of the supply/completion of service.Rule 34(2) of CGST Rules clears the doubt to the effect that hybrid procedure cannot be adopted. Lacunae or doubt, if any, is also dispelled by way of Rule 34(2) of CGST Rules. In a nutshell, you are absolutely right. Tax is to be paid on 38500/- as sought for. – Reply By Shyam Agarwal – The Reply = Thanks Kasturi Sir, you are really always source of inspiration for all of us. Please clear one thing in Rule 34 of CGST rules which states that the rate of exchange for determination of value of taxable services shall be the applicable rate of exchange determined as per the generally accepte
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mphasize on the time of supply i.e. date of invoice if issued with in prescribed period. Rule and Section are not contradictory. You cannot take benefit of the wordings, whichever is earlier . When I posted my first reply I did not go through Rule 34. Rules are framed to clarify Act. When Rule says the date of supply is determinant factor for taxable value, the date 31.10.18 is decisive factor. Rest you may seek opinion of other experts. – Reply By Shyam Agarwal – The Reply = Sir, thanks for clarify my doubt in interpretation of Rule 34 read with Section 13. Please consider one more situation, suppose in above case, if supplier does not issue invoice within the time limit prescribed under section 31(2) of CGST act i.e. If Invoice is issued after completion of 30 days from the date of completion of service. Then still the answer will be same i.e.for entire service rate of exchange will be the date 31.10.18 (which is date of completion of service) or for part of service the date will be
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is to be adjusted or refunded subject to the terms and conditions executed between service provider and service receiver.Amount received on 2.9.18 does not conform to the legal definition of ' PAYMENT . Since the invoice has been issued on 31.10.18, there is no room for 'but' and 'if'. Now past cannot be undone. Hypothetical situation Had you received full payment in advance on 2.9.18, you would have to go by the date of invoice for determination of rate of exchange for correct payment GST. Sometime supply is continuous for a number of years e.g. construction service, there the issue of 'whichever earlier' in connection with the date of receipt of payment arises. Hence I stick to my second reply posted after going through Rule 34 (2) in your specific query. – Reply By Shyam Agarwal – The Reply = Kasturi Sir thanks for elaborate your detailed analysis which shows really a great experience and hold on law. I agree with your views but please clear one thing whe
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of service. provision' does not always stand for 'clause' . Here provision means to provide service i.e. the date of providing service. It is relevant to mention that there is no no difference between Supply of service and Providing of Service . You are talking of completion of service and I am emphasizing on Supply . Service can be supplied/provided in piecemeal also in case of continuous supply of service e.g. Construction Service. This situation is not applicable to your case because intermediary services do not conform to the term, Continuous supply . The date of provision of service does not mean the date of completion of service. The word, Completion is neither present in Section nor in Rule. . In the absence of date of invoice, one is to resort to the date of providing/supplying service or receipt of payment, whichever is earlier. Receipt of payment is last resort. The phrase date of receipt of payment stands for the date of receipt of consideration on account of ser
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