Time of supply in case of RCM

[Lav Prajapati]

Dear Expert member Please check this example is correct or not in case of Time of supply of goods under RCM. my concern about calculation of 'Date immediately following 30 days from the date of issue of invoice'

Example - Mint Industries Ltd., a registered supplier, give order of material from Green INC, USA on 13^th August (goods order date). The relevant invoice for $ 1,20,000/- is raised by Green Inc on 18^th August. Mint Industries Ltd. Makes the payment against the said invoice 22^nd September but goods received as on 27^th December.

Provisions Time of supply, earliest of the following dates

• Date of receipt of goods, or
• 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
• Date immediately following 30 days from the date of issue of invoice or any other legal document in lieu of invoice by the supplier.

In this case - As per term Sec. 12 (3), Time of supply, earliest of the following dates :-

• Date of receipt of goods – 27^th December
• Date immediately following 30 days from the date of issue of invoice – 17^th September
• Date of receipt of payment by the supplier- 22^nd September

Therefore, time of supply of goods 17^th September.

AI Summary

Clarification on Reverse Charge Mechanism: RCM doesn't apply to imports; customs duty and IGST rely on Bill of Entry date. A query was raised regarding the correct determination of the time of supply for goods under the Reverse Charge Mechanism (RCM) in the context of Goods and Services Tax (GST). The scenario involved Mint Industries Ltd. ordering goods from Green Inc., USA, with the invoice issued on August 18th, payment made on September 22nd, and goods received on December 27th. The time of supply was identified as September 17th, based on the provision that considers the date immediately following 30 days from the invoice issue. However, multiple replies clarified that RCM does not apply to imports, as customs duty and IGST are based on the Bill of Entry date.