Continuous Supply of Goods - Invoice Creation

308 views 3 replies

Sri Ranjini Venkatachalapathy

55 Points Joined February 2013

Hello Sir,
In case of continuous supply of goods of a contract of the payment is to be done after completion of an event but the payment date is not ascertainable then when should the GST Invoice be raised..
For Example,
Scenario 1 : A company in a context of continuous supply of goods receives a instruction on 03/2021 to supply goods to one place and again on 07/2021 to supply same goods to the same place, then can the GST Invoice be raised on 07/2021 for both the supply if the supply is to be completed before 11/2021
Scenario 2: A Company receives a instruction on 05/2021 to deliver the goods on 12/2021 and the goods are transported during 05/2021 by the supplier then can the supplier raise the GST Invoice on 07/2021.

Replies (3)

CA R SEETHARAMAN

CA Practice

147900 Points Joined September 2013

1 Raise invoice for each consignment. In case of single consignment for both the request invoice may be raised on 7th.

2 No , invoice has to be raised on 5th being date of transportation.

Sri Ranjini Venkatachalapathy

55 Points Joined February 2013

Thank you sir.
For the Scenario 1: Is there any tax evasion if the materials is supplied by the supplier on Mar,2021 and the Invoice raised on July,2021.. Can the buyer make the payment for July,2021 raised Invoice

CA Rashmi Gandhi

Chartered Accountant

86505 Points Joined April 2011

As per sec 13(2) of CGST Act the time of supply of service for continuous supply of service shall be the earliest of the following dates:- If the invoice is issued within the prescribed period under section 31(5), the date of issue of invoice by the supplier or the date of receipt of payment whichever is earlier. or If the invoice is not issued within the prescribed period under section 31(5), then the date of provision of service or the date of receipt of payment whichever is earlier.

For example: A Lltd enters into a contract with Mr. B for construction service for a period of one year to complete the project. Mr. B receives lump sum amount of 100,000 on 10th September so if he receives the payment on lump sum or in installment without any predetermined or unascertained date then the invoice shall be issued before or at the time when the supplier of service receives payment i.e. 10th of September.