Section 12(6) of CGST Act 2017 – Time of Supply linked with GSTR-1
By: – Pradeep Jain
Goods and Services Tax – GST
Dated:- 25-5-2017
As per Section 12(6) of CGST Act, 2017 relating to Time of Supply of Goods states that time of supply to the extent it relates to an addition in the value of supply by way of interest, late fee or penalty for delayed payment of any consideration shall be the date on which the supplier receives such addition in value.
This means that the tax is payable on interest received for delayed payment. This was not payable in current excise regime but the same will be payable in proposed GST regime.
But this provision of time of supply has made the things more worse. The tax on such interest etc. is pa
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e same in his GSTR-1 Return of January 2018 when such debit note was issued and as such his liability to pay tax will arise in month itself.
However, as per Section 12(6) the time of supply relating to debit note issued shall be date on which such amount is received by assessee, thus the supply falls in May 2018. Hence, the tax is payable in May 2018 only. But there is no mention of treatment in GSTR-1 return. The return will create liability in the month in which debit note is raised. Hence, there should be provision in return for the same.
Moreover, it is written in terms and conditions that the payment should be made within a particular time and interest will be charges afterwards. But as trade practice, nobody ask for the interest on
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