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Time of Supply -Section 12  under Revised Model GST Law may be not suitable for some Industries.

Can you think of payment of Excise duty / Sales tax before clearance/sale of the goods? Shockingly, GST expects payment of GST even before supply.

Section 12 of Revised Model GST Act cleared by Union Cabinet which will be approved definitely in Lok Sabha by virtue of majority.

Section 12 – Time of supply of goods

(1) The liability to pay CGST/SGST on the goods shall arise at the time of supply as determined in terms of the provisions of this section.
(2) The time of supply of goods shall be the earliest of the following dates, namely,-

(a) (i) the date on which the goods are removed by the supplier for supply to the buyer, in a case where the goods  are required to be removed and
(ii) the date on which the goods are made available to the buyer, in a case where the goods are not required to be removed,
(b) the date on which the supplier issues the invoice with respect to the supply; or
(c) the date on which the supplier receives the payment with respect to the supply; or
(d) the date on which the buyer shows the receipt of the goods in his books of accounts

Problems faced by different industries

a) EVM Manufacturers 

For 2019 elections of Lok Sabha, PSU’s have to manufacture and validate EVM’s at least one year before the elections. Then, they have to await the instructions from Commission about delivery schedule throughout India. If the above rule is followed, the manufacturers of EVM have to pay GST immediately after validation although they are not supplied.

b) Fabrication and Heavy Engineering Industry like BHEL, BHPV, L&T

They manufacture customized and tailor-made goods as per the specifications of the customers. In some cases, even the transportation from factory to Port takes one week as the Consignments are called ”ODC” or Over Dimension Consignments. They need NOC and traffic clearance from Police, Municipality, Electricity Department etc. They are already losers by paying GST on advances received from customers. If the customer instructs the supplier to await the instructions, how supplier can be punished ?

c) Defense undertakings

The customers are identified but they are moved to war areas based on war clouds. This provision is totally unsuitable to our own defense needs.

( Author –  CMA VSRM KASYAPA is a ST trainer and GST  Consultant, trained by ICMA, SIRC as Master Trainer in GST. He can be reached as kasyapavsrm@gmail.com, Contact-9550232838.)

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