What is Continuous Supply of Goods
As per section 2(33) of the CGST Act, 2017, “continuous supply of goods” means a supply of goods which is provided, or agreed to be provided, continuously or on recurrent basis, under a contract, whether or not by means of a wire, cable, pipeline or other conduit, and for which the supplier invoices the recipient on a regular or periodic basis and includes supply of such goods as the Government may, subject to such conditions, as it may, by notification, specify.
The definition has following important points:
1. Supply of goods or services on a continuous or recurrent basis– There must be a supply of goods or services on a continuous or recurrent basis. The term “recurrent” means regularly or frequently. For example if a registered person supply goods to a particular customer multiple times in a month, in separate consignments, this would consist continuous supply.
2. Under a Contract – Supply has to be under a contract. The contract need not be express or in writing. It may be stipulated from the conduct of the parties.
3. Whether or not by means of a wire, cable, pipeline or other conduit – Though the statute has used terms as wire, cable, pipeline or other conduit, they are merely illustrative. Even if, the supplier delivers goods to the recipient through other means that would constitute a continuous supply.
4. Supplier invoices the recipient on a regular or periodic basis – Which means, invoice need not be raised after every consignment. The periodic billing is permitted.
5. And includes supply of such goods as the Government may, subject to such conditions, as it may, by notification, specify– Government may come out with notification/s in future specifying certain supply of goods to be continuous supply. However, even if the goods are not notified but if they otherwise satisfy the definition of continuous supply, they would constitute as continuous supply of goods.
Invoice in case of continuous supply of goods
In case of continuous supply of goods, where successive statements of accounts or successive payments are involved, the invoice shall be issued before or at the time each such statement is issued or, as the case may be, each such payment is received.
Invoice in case of continuous supply of services
In case of continuous supply of services, where:
(a) The due date of payment is ascertainable from the contract, the invoice shall be issued on or before the due date of payment.
(b) The due date of payment is not ascertainable from the contract, the invoice shall be issued before or at the time when the supplier of service receives the payment.
(c) The payment is linked to the completion of an event, the invoice shall be issued on or before the date of completion of that event.
Issue of invoice in case, where supply of service ceases under a contract before the completion of supply
In a case where the supply of services ceases under a contract before the completion of the supply, the invoice shall be issued at the time when the supply ceases and such invoice shall be issued to the extent of the supply made before such cessation.
Transportation of goods without an invoice
In the following cases it is permissible for the consignor to issue a delivery challan in lieu of invoice at the time of removal of goods:
(a) Supply of liquid gas where the quantity at the time of removal from the place of business of the supplier is not known
(b) Transportation of goods for job work
(c) Transportation of goods for reasons other than by way of supply
(d) Such other supplies as may be notified by the Board
The delivery challan, serially numbered not exceeding 16 characters, in one or multiple series, shall contain the following details:
(i) Date and number of the delivery challan
(ii) Name, address and GSTIN of the consigner, if registered
(iii) Name, address and GSTIN or UIN of the consignee, if registered
(iv) HSN code and description of goods
(v) Quantity (provisional, where the exact quantity being supplied is not known)
(vi) Taxable value
(vii) Tax rate and tax amount – Central tax, State tax, Integrated tax, Union territory tax or cess, where the Transportation is for supply to the consignee
(viii) Place of supply, in case of inter-State movement
(ix) Signature
The delivery challan shall be prepared in triplicate, in case of supply of goods, in the following manner:
(a) The original copy being marked as ORIGINAL FOR CONSIGNEE
(b) The duplicate copy being marked as DUPLICATE FOR TRANSPORTER
(c) The triplicate copy being marked as TRIPLICATE FOR CONSIGNER
Where goods are being transported on a delivery challan in lieu of invoice, the same shall be declared in FORM [WAYBILL].
Where the goods being transported are for the purpose of supply to the recipient but the tax invoice could not be issued at the time of removal of goods for the purpose of supply, the supplier shall issue a tax invoice after the delivery of goods.
Where the goods are being transported in a semi knocked down or completely knocked down condition:
(a) The supplier shall issue the complete invoice before dispatch of the first consignment
(b) The supplier shall issue a delivery challan for each of the subsequent consignments, giving reference of the invoice
(c) Each consignment shall be accompanied by copies of the corresponding delivery challan along with a duly certified copy of the invoice
(d) The original copy of the invoice shall be sent along with the last consignment
Supplies as are notified by the board may be moved without invoice against a delivery challan Section 31(4) has provided that in case of continuous supply of goods, where successive statements of accounts or successive payments are involved, the invoice shall be issued before or at the time each such statement is issued or, as the case may be, each such payment is received.
However, how would the supplier move goods from his place to that of the recipient without invoice. Whether the supplier can make use of delivery challan? Will the revenue officials seize such goods moving without invoice.
Rule 55(1) (d) lays down that such supplies as are notified by the board may be moved without invoice against a delivery challan. However the Govt. has yet to Notify such supplies. In such cases delivery challan if generated is not as per law in absence of notification.
The taxpayer has the option to move goods without invoice and it also makes sense for many businesses who have multiple B2B accounts with multiple small billings during a particular period and for business reasons they have to issue periodic invoice instead of a consolidated invoice.
The Government should therefore, come out with a clarification on the subject to avoid any misinterpretation despite legal provisions permitting mo without invoice. Under pre GST regime also goods could be moved on the basis of delivery challan particularly in case of delivery to retail stores which are acknowledged by the purchaser.
Alternatively, an applicant can apply for advance ruling under Advance Ruling Provisions even before taking up a transaction (proposed supply of goods or services) or in respect of a supply which is being undertaken. The only restriction is that the question being raised is already not pending or decided in any proceedings in the case of applicant.
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In case of COAL supplied through trucks can we apply this contentious supply concept and ask for a consolidated bill?