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Time of supply for an addition in value of supply by way of interest, late fee or penalty for delayed payment is:
ADate of original supply
BDate of issue of original invoice
CDate on which the supplier receives such addition in value
DDate when payment becomes overdue
Answer & Solution
Correct answer: C. Date on which the supplier receives such addition in value
1. Sec 12(6) and Sec 13(6) deal with additions to value via interest, late fee or penalty for delayed payment.
2. Time of supply for the addition is the date the supplier receives that amount.
3. Tax on the original supply is unaffected; this only governs the tax on the additional amount.
_Source: ICAI BoS CA Final Paper 8, Ch 4 "Time of Supply", §Sec 12(6)/13(6)_
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