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“associated enterprises” shall have the same meaning as assigned to it in section 92A of the Income-tax Act, 1961;
‘Associated enterprise’ is referred to only in the context of time of supply of services where the supplier is an associated enterprise (located outside India) of the recipient.
• In such cases, the time of supply will be the date of entry in the books of account of the recipient of supply or the date of payment, whichever is earlier.
• This in turn means that provision entries made at the time of closure of books of account for a year (on accrual basis) may trigger GST liability in the hands of the recipient, under reverse charge mechanism.
It may be noted that in addition to associated enterprise, the Act also defines ‘related person’, the reference to which is made in the context of deemed supply (Schedule I) and valuation.
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