TMI Blog2023 (7) TMI 521X X X X Extracts X X X X X X X X Extracts X X X X ..... through book adjustment, subject to the other conditions and restrictions prescribed in Sections 16, 17 and 18 of the CGST Act, 2017 and the rules made there under. - KER/03/2023 - - - Dated:- 2-3-2023 - DR. S. L. SREEPARVATHY, IRS SHRI ABRAHAM RENN S., IRS, MEMBER Authorized Representative : Mr. Jiji Varghese 1. M/s. Paragon Polymer Products (Private Limited ( hereinafter referred to as the applicant ) is in the business of manufacturing and trading of footwear. 2. At the outset, it is clarified that the provisions of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as CGST Act) and the Kerala State Goods and Services Tax Act, 2017 (hereinafter referred to as KSGST Act) are the same except for certain provisions. Accordingly, a reference hereinafter to the provisions of the CGST Act, Rules, and the notifications issued there under shall include a reference to the corresponding provisions of the KSGST Act, Rules, and the notifications issued there under. 3. Applicant requested advance ruling on the following: In case of sale and buy back transactions, whether the input tax credit is admissible in respect of goods purchased from outsour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the payer a debt, and accepts a reduction in such a debt liability as a valid form of payment, that should also be regarded as a valid 'consideration' for a supply. In other words, reduction in book debt (an asset in the payer's books of accounts) is a valid 'consideration'. Also, payment through adjustment of the books of accounts is a prevalent Commercial practice. Para 42 of Indian Accounting Standards 32 provides that a financial asset and a financial liability shall be offset and the net amount presented in the balance sheet when, and only when, an entity (a) currently has a legally enforceable right to set off the recognized amounts; and (b) intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously. The applicant also draws the attention of the authority to the ruling made by the west Bengal Authority for Advance Ruling in a similar case in case of Senco Gold Ltd. 5. Comments of the Jurisdictional Officer: 5.1. The application was forwarded to the jurisdictional officer as per provisions of Section 98(1) of the CGS1 Act. The jurisdictional officer has not offered any comments and hence it is presumed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the direction of such registered person, whether acting as an agent or otherwise, before or during movement of goods, either by way of transfer of documents of title to goods or otherwise; (ii) where the services are provided by the supplier to any person on the direction of and on account of such registered person. (ba) the details of input tax credit in respect of the said supply communicated to such registered person under section 38 has not been restricted; (c) subject to the provisions of section 41, the tax charged in respect of such supply has been actually paid to the Government, either in cash or through utilisation of input tax credit admissible in respect of the said supply; and (d) he has furnished the return under section 39: PROVIDED that where the goods against an invoice are received in lots or instalments, the registered person shall be entitled to take credit upon receipt of the last lot or instalment: PROVIDED FURTHER that where a recipient fails to pay to the supplier of goods or services or both, other than the Supplies on which tax is payable on reverse charge basis, the amount towards the value of supply along with tax pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess the supplier applies such deposit as consideration for the said supply; 7.5. Accordingly, from the above definition it is revealed that the term consideration includes, in relation to the supply of goods or services, any payment, made or to be made, whether in money or otherwise, and also the monetary value of any act or forbearance. Thus, definition of 'consideration' is an inclusive definition which covers in its ambit any form of payment. Therefore, if the payee owes the payer a debt, and accepts a reduction in such a debt liability as a valid form of payment, that should also be regarded as a valid 'consideration' for a supply. 8. The relevant provisions of Section 12 and 13 of the CGST Act, 2017 which governs the time of supply of goods and time of supply of services is reproduced below; SECTION 12 - Time of supply of goods. - (1) The liability to pay tax on goods shall arise at the time of supply, as determined in accordance with the provisions of this section. (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 requi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s an amount up to one thousand rupees in excess of the amount indicated in the tax invoice, the time of supply to the extent of such excess amount shall, at the option of the said supplier, be the date of issue of invoice relating to such excess amount. Explanation .- For the purposes of clauses (a) and (b) - (i) the supply shall be deemed to have been made to the extent it is covered by the invoice or, as the case may be, the payment; (ii) the date of receipt of payment shall be the date on which the payment is entered in the books of account of the supplier or the date on which the payment is credited to his bank account, whichever is earlier. (3) In case of supplies in respect of' which tax is paid or liable to be paid on reverse charge basis, the time of supply shall be the earlier of the following dates, namely :- (a) the date of payment as entered in the books of account of the recipient or the date on which the payment is debited in his bank account, whichever is earlier; or (b) the date immediately following sixty days from the date of issue of invoice or any other document, by whatever name called, in lieu thereof by the supplier : ..... X X X X Extracts X X X X X X X X Extracts X X X X
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