Time of supply under GST

Time of Supply Under GST

Goods and Service Tax commonly known as GST is basically charged on Supply of Goods and Services. In earlier Indirect Taxes taxable event use to be Sales, Removal, or Provision of Services. However, in GST Taxable event in Supply of Goods or Services. Hence, it is must & Important to understand, when is the supply made by dealer. This is the event which triggers liability of GST payment.

Relevant provisions for Time of Supply has been prescribed under section 12,13 &14 of GST Act. Considering the matter is very complicated to understand, I will try and put the same in very simple layman words. However, the wordings are to make you understand concept of Time of Supply under GST and not the legal purpose.

As we are dealing here with two categories are being supplied by any dealers, Goods and Services so let us discuss both the supplies differently.

Time of Supply in Case of Goods (Section 12)

The time of Supply in case goods is determined earlier of following dates:

  1. Date of Issue of Invoice by Supplier OR
  2. Date of Receipt of Payment against supplies

The liberty has been provided for small dealers whose supply value is less than Rs. 1000/-. They have been provided an option to choose any date we have discussed in (1) and (2) earlier.

The section also explains how one should determine date of receipt of payment by the supplier. Such receipt date should be earlier of following:

  1. Date on which the payment is entered in his books of accounts OR
  2. The date on which the payment is credited to his bank account

Time of Supply where Reverse Charge is applicable

In case of supplies in respect of which tax is paid or liable to be paid on reverse charge basis, the time of supply shall be the earliest of the following dates, namely—

  1. the date of the receipt of goods
  2. the date on which the payment is made
  3. the date immediately following thirty days from the date of issue of invoice by the supplier
  4. date of entry in the books of account of the recipient of supply

Supply by way of Voucher

When supply is made by way of coupons, Redemption voucher to any person, GST is also applicable on the same. The time of supply in such case is earlier of the following:

  1. the date of issue of voucher
  2. the date of redemption of voucher

Overriding provision for all above cases where it is impossible to determine the date of supply by above method date of supply shall be:

  1. In a case where a periodical return has to be filed, be the date on which such return is to be filed
  2. in any other case, be the date on which the CGST/SGST is paid.

To simplify the above, please refer to below diagram to understand the complicated provisions of time of supply.

Time of Supply of Services (Section 13)

Now let’s talk about time of supply of services determined by GST law. The time of supply of services shall be the earlier of the following dates,

  1. the date of issue of invoice by the supplier
  2. the last date on which he is required, under section 28
  3. the date on which the supplier receives the payment

The liberty has been provided for small dealers whose supply value is less than Rs. 1000/-. They have been provided an option to choose any date we have discussed in (1) and (2) earlier.

The section also explains how one should determine date of receipt of payment by the supplier. Such receipt date should be earlier of following:

  1. Date on which the payment is entered in his books of accounts OR
  2. The date on which the payment is credited to his bank account

Time of Supply where Reverse Charge is applicable

In case of supplies in respect of which tax is paid or liable to be paid on reverse charge basis, the time of supply shall be the earliest of the following dates, namely—

  1. the date of the receipt of Services
  2. the date on which the payment is made
  3. the date immediately following Sixty days from the date of issue of invoice by the supplier
  4. date of entry in the books of account of the recipient of supply

Supply by way of Voucher

When service supply is made by way of coupons, Redemption voucher to any person, GST is also applicable on the same. The time of supply in such case is earlier of the following:

  1. the date of issue of voucher
  2. the date of redemption of voucher

Overriding provision for all above cases where it is impossible to determine the date of supply by above method date of supply shall be:

  1. In a case where a periodical return has to be filed, be the date on which such return is to be filed
  2. in any other case, be the date on which the CGST/SGST is paid.

Time of Supply in case of Tax rate changes (Section14)

Considering Normal Scenarios here, for Time of supply, let us now consider situation of Tax rate change. It seems that, law maker has learned a lot from previous history of law. Hence, at the inception itself, they have provided for such situations and how to deal with tax in such circumstances. Following Table will provide you god insight for the same.

PARTICULARS GOODS OR SERVICES SUPPLIED BEFORE RATE CHANGE GOODS OR SERVICES SUPPLIED BEFORE RATE CHANGE
Invoice Issued After Rate Change Before Rate Change After Rate Change Before Rate Change Before Rate Change After Rate Change
Payment Received After Rate Change After Rate Change Before Rate Change After Rate Change Before Rate Change Before Rate Change
Time Of Supply Earlier Of Above Date Of Invoice Date Of Receipt Date Of Receipt Earlier Of Above Date Of Invoice
Applicable Tax Rate Old Tax Rate Old Tax Rate Old Tax Rate New Tax Rate Old Tax Rate New Tax Rate

 

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