Example 33

Mr. Kamal, has agreed for inter-state supply of service Rs. 10 lacs. He received an advance of Rs. 7 lacs on 28th Aug, 2017 and balance on actual completion of services on 29th Sept, 2017 and invoice is also issued on the same day.

Compute the Integrated tax received by Mr. Kamal, assuming IGST rate on such services is 18%.

Ans

Time of supply  Event   Total Amount received  Integrated Tax
28-08-17  Advance                 700,000.00 (700000*18/118) = 106780
29-09-17  Balance Amount                  300,000.00                   (300000*18/118) = 45763

 Section 13 determines time of supply, according to which date of payment or date of invoice whichever is earlier is to be taken as time of supply. Rule 35 Chapter-IV Determination Of Value Of Supply  provides that when value of supply is cum duty price i.e. inclusive of Central tax, state tax, integrated tax, union territory tax then the tax shall be determined in the above manner.