A buyer of goods pays the price late, and the supplier adds a charge for the delay. Under section 12(6) of the CGST Act, 2017, what is the time of supply of that charge?
Question and options
A buyer of goods pays the price late, and the supplier adds a charge for the delay. Under section 12(6) of the CGST Act, 2017, what is the time of supply of that charge?
The date on which the supplier raises a debit note for that charge
The date on which the supplier receives that charge
The date on which the goods were removed
The date of the original invoice for the goods
Answer and explanation
Section 12(6) of the CGST Act fixes the time of supply of an addition to value by way of interest, late fee or penalty for delayed payment of consideration at the date on which the supplier receives the addition. The interest is not tied back to the invoice or removal date of the goods, nor to any debit note.
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