GST

Time of Supply under GST: A Comprehensive Detailed Information

time of supply

Time of supply or as earlier as it was the point of taxation is a process which is used to determine the point of time, when tax is required to be paid on supply of goods or services. Section 12-14 of the CGST act contains provisions to determine the time of supply.

Discussions made:

  1. What is the Time of Supply in case of Supply of Goods?
  2. What is the Time of Supply in case of Supply of Services?
  3. What is the Time of Supply when there is Change in the Tax rate in case of Goods or Services?
  4. What is the Time of Supply of Vouchers?
  5. Time of Supply-Residuary provisions.
  6. Common Time of Supply for Goods and Services

Time of Supply for Supply of Goods

Particulars Time of Supply
 

Forward Charge i.e. Tax payable by Supplier (1.07.2017-12.10.2017)

           
 

Earlier of the following dates: the date on which invoice is issued by the supplier or the date on which he is required to issue the invoice i.e. due date of  Invoice or last date the date of receipt of payment   The date of receipt of payment shall earlier of the date when the supplier enters the payment in his books of accounts or on the date on which the payment is credited to his bank account.

 
 

Forward Charge i.e. Tax payable by Supplier (13.10.2017-14.11.2017)

         
 

Earlier of the following dates: the date on which invoice is issued by the supplier or the date on which he is required to issue the invoice i.e. due date of Invoice or last date the date of receipt of payment Point no. (c) will not be applicable if the taxpayer has not opted for Composition Scheme (Notification no. 66/2017)   The date of receipt of payment shall earlier of the date when the supplier enters the payment in his books of accounts or on the date on which the payment is credited to his bank account. In case the turnover is less than 1.5 Crores, No GST on Advance.

 

Forward Charge i.e. Tax payable by Supplier (15.11.2017 Onwards)

 

Earlier of the following dates: the date on which invoice is issued by the supplier or the date on which he is required to issue the invoice i.e. due date of Invoice or last date    It Simply means no GST on Advance in case of Supply of Goods irrespective of turnover.

 

Reverse Charge Mechanism

 

Earliest of the following dates: the date when goods are received or the date when payment is entered in the books of account of the recipient or the date when payment is debited in his bank account, whichever is earlier or31st day i.e. day after 30th day from the date on which invoice is issued or any other document   If it is not possible to determine the time of supply in respect of supplies under Reverse Charge Mechanism, the time of supply in such case shall be the date of entry in the books of account of the recipient.

What is the Time of Supply of Services?

Particulars Time of Supply

Forward Charge- Invoice is  issued within the prescribed period

Earliest of the following dates: the date on which invoice is issued by the supplier or date on which the payment is entered by the supplier in his books of account or date of credit of payment to his bank account

Forward Charge- Invoice is not issued within prescribed period

Earliest of the following dates: the date of provision of service or date on which the payment is entered by the supplier in his books of account or date of credit of payment to his bank account.

If above events are not ascertainable

The date receipt of services as shown by the recipient in his books of accounts

 

Reverse Charge Mechanism

Earlier of the following dates: the date on which payment is entered in the books of account of the recipient or the date of debit of payment is debited in his bank account or61st day i.e day after 60th day from the date on which invoice is issued   If it is not possible to determine the time of supply, the time of supply shall be the date on which entry is made in the books of account of the recipient.

Import of Service from AEs

the date on which entry is made in the books of account of the recipient of supply or the date of payment, whichever is earlier. (AEs – Associated Enterprises)

READ  How to be Prepared for the Reverse Charge Mechanism

What is Time of Supply when there is a change in Tax Rate in respect of Supply of Goods or Services?

  • When supply of Goods or services or both have been made before the change in rate of tax
Invoice Payment Time of Supply

After change

After change

The date on which payment is received or date on which invoice is issued whichever is earlier

Before change After change Date of issue of invoice
After change Before change

Date of receipt of payment

  • When the supply of goods or services or both have been made after the change in the rate of tax
Invoice Payment Time of Supply

Before change

Before change

The date on which payment is received or date on which invoice is issued whichever is earlier

Before change

After change

date of receipt of payment

After change

Before change

date of issue of invoice

  • The date on which payment is received is the date on which credit is made in the bank account if such credit in the bank account[1] is made after four working days from the date on which tax rate is changed.

Also, Read: How to Change GST Registration details of a business.

What Is The Time of Supply of Vouchers?

In such case time of supply shall be:

Supply is Identifiable

Date on which voucher is issued

All other cases

Date on which voucher is redeemed

Time of Supply-Residuary Provision

In cases where time of supply cannot be determined, it shall be:

If periodical return is filed

Date of filing of return

In any other case

Date of payment of tax

READ  GST Exemption: Agriculturist and Small Traders

Common for Goods And Services

Unable to determine Time of Supply

Where there is a need to file a periodical return, the date on which such return is to be filed will be the time of supply or in any other case, the date of payment of tax.

 

Petty Payments

Where the supplier receives an amount which is at least Rs 1000/- more than the amount indicated in the tax invoice, the time of supply in respect of such excess amount at the option of the said supplier shall be the date on which invoice is issued.

Vouchers

If it is possible to identify the supply at that point, the date on which voucher is issued will be the time of supply orIn all other cases it will be the date on which voucher is redeemed.

Interest, late fee or penalty

  Date of receipt of such addition in value by the supplier

Conclusion

By understanding the above-mentioned provisions, one can determine the point of taxation or time of supply which will help in determining the due date on which tax needs to be paid. It is very important to determine the correct point of taxation or time of supply so that timely payments of tax are made and any late interest is avoided.

Also, Read: New GST rates for real estate: Relief for homebuyers.


Trending Posted

Get Started Live Chat