Anlysis of Time Of Supply Under GST
Time of Supply
Meaning :- Time of supply means the time when the liability to pay the tax under Goods and Services Tax Act, 2017 arises. It may differ from the time of actual supply of goods & services. There are separate provisions under the GST law for determination of the time of supply of goods and time of supply of services.
1. Time of Supply in Case of Supply of Goods :-
A. Time of Supply of Goods :-
1. Section 12 of the CGST Act 2017, deals with the provisions related to time of supply of goods and by virtue of Section 20 of the IGST Act 2017, these provisions are made applicable to inter-State supplies of goods.
2. Time of supply of goods is earliest of the following dates:
Ø Date of issue of invoice by the supplier;
Ø Last date on which the supplier is required to issue the invoice, as per Section 31 of the CGST Act 2017; or
Ø The date on which the supplier receives the payment with respect to the supply .
3. Where an amount of up to Rs. 1,000/- is received in excess, the time of supply to that extent shall at the option of the said supplier, be the date of issue of invoice in respect of such excess amount.
4. As per Notification no. 66/2017-Central Tax dated 15.11.2017, suppliers of goods (other than composition dealers) will have to pay tax at the time of issue of invoice only.
B. Time of supply of Goods (Reverse Charge Mechanism)
Time of supply of goods, for cases where tax is liable to be paid on reverse charge basis, shall be the earliest of the following dates:
Ø The date of receipt of goods; or
Ø The date of payment as entered in the books of accounts of the recipient or the date on which the payment is debited in his bank account, whichever is earlier; or
Ø The date immediately following 30 days from the date of issue of invoice or any other document in lieu of invoice by the supplier
However, if it is not possible to determine the time of supply in aforesaid manner, then the time of supply shall be the date of entry of the transaction in the books of account of the recipient of supply.
C. Time of supply of Goods in case of supply of vouchers by a supplier
In such cases, the time of supply will be:
Ø The date of issue of voucher, if the supply is identifiable at that point of time; or
Ø The date of redemption of voucher, in all other cases.
D. Time of supply of Goods (Residual provision)
In case it is not possible to determine the time of supply under aforesaid provisions, the time of supply shall be:
Ø The due date of filing of return, where periodical return is to be filed; or
Ø The date of redemption of voucher, in all other cases.
E. Time of supply of Goods (for cases of addition in the value of supply)
The date of payment of tax, in any other case. Time of supply related to an addition in the value of supply of goods by way of interest, late fee or penalty for delayed payment of any consideration shall be the date on which supplier receives such addition in value.
2. Time of Supply in Case of Supply of Services :-
A. Time of Supply of Services
Section 13 of the CGST Act 2017, deals with the provisions related to time of supply of services and by virtue of Section 20 of the IGST Act 2017, these provisions are made applicable to inter-State supplies of services.
The time of supply of services is as follows:
(i) Section 13(2)(a) - Invoice is issued in a timely manner than the time of supply will be the earlier of the followings :-
Ø The date of issue of invoice by the supplier; or
Ø The date of issue of invoice by the supplier; or
(ii) Section 13(2)(b) - Invoice not issued in a timely manner than the time of supply will be the earlier of the followings :-
Ø the date of provision of service; or
Ø the date of receipt of payment
(iii) Section 13(2)(c) - Residual Cases
Ø Where Section 13(2) (a) and (b) does not apply, the date on which the recipient shows the receipt of services in his books of account.
Note: Where an amount of up to Rs. 1,000/- is received in excess, the time of supply to that extent shall at the option of the said.
Supplier, be the date of issue of invoice relating to such excess amount.
B. Time of supply of Services (Reverse Charge Mechanism)
Ø Time of supply of services, for cases where tax is liable to be paid on reverse charge basis, shall be the earlier of the following dates:
v the date of payment as entered in the books of account of the recipient or the date on which the payment is debited in his bank account, whichever is earlier; or
v the date immediately following 60 days from the date of issue of invoice or any other document in lieu of thereof by the supplier.
Ø However, if it is not possible to determine the time of supply in aforesaid manner, then the time of supply is the date of entry of the transaction in the books of accounts of the recipient of supply.
Ø However, in case of supply by associated enterprises 4, where the supplier of service is located outside India, the time of supply shall be the date of entry in the books of account of the recipient of supply or the date of payment, whichever is earlier.
C. Time of supply of Services in case of supply of vouchers by a supplier
In such cases, the time of supply will be:
Ø The date of issue of voucher, if the supply is identifiable at that point of time;
Ø The date of redemption of voucher, in all other cases.
D. Time of supply of Services (Residual provisions)
In case it is not possible to determine the time of supply under aforesaid provisions, the time of supply shall be:
Ø The due date of filing of return, in case where periodical return has to be filed.
Ø The date of payment of tax, in all other cases
E. Time of supply of Services (for cases of addition in the value of supply)
Time of supply related to an addition in the value of supply of services by way of interest, late fee or penalty for delayed payment of any consideration shall be the date on which supplier receives such addition in value.
3. Time of Supply where there is Change in Rate of Tax [Goods as well as Services]
Ø Notwithstanding the provisions of Section 12 or Section 13 of the CGST Act 2017, in case of change in the rate of tax in respect of supply of goods or services or both, time of supply shall be determined in the following manner in accordance with the provisions of the Section 14 of the CGST Act 2017:
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Sr. |
Goods / Services Supplied |
Issue of Invoice |
Receipt of Payment |
Time of supply |
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Section 14(a) – Where Goods / Services are supplied BEFORE the change in rate of tax |
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1 |
Before Change |
After Change |
After Change |
Date of Invoice or Receipt of Payment, whichever is earlier |
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2 |
Before Change |
Before Change |
After Change |
Date of Issue of Invoice |
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3 |
Before Change |
After Change |
Before Change |
Date of Receipt of Payment |
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Section 14(b) – Where Goods / Services are supplied AFTER the change in rate of tax |
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4 |
After Change |
Before Change |
After Change |
Date of Receipt of Payment |
|
5 |
After Change |
Before Change |
Before Change |
Date of Invoice or Receipt of Payment, whichever is earlier |
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6 |
After Change |
After Change |
Before Change |
Date of Issue of Invoice |
- Normally the date of receipt of payment is the date of credit in the bank account of the recipient of payment or the date on which the payment is entered into his books of account, whichever is earlier. However, in cases of change in rate of tax, the date of receipt of payment is the date of credit in the bank account if such credit is after four working days from the date of change in the rate of tax.
- As per Notification no. 66/2017-Central Tax dated 15.11.2017, suppliers of goods (other than composition dealers) will have to pay tax at the time of issue of invoice only.
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§ The date on which the supplier receives the payment shall be the date on which the payment is entered by the supplier in his books of account or the date on which the payment is credited to his bank account, whichever is earlier. § The said clause is not applicable to registered persons who have not opted for Composition Scheme. § The date of receipt of payment shall be the date on which the payment is entered in the books of account of the supplier or the date on which the payment is credited to his bank account, whichever is earlier § As per Section 2(12) of the CGST Act 2017 associated enterprises shall have the same meaning as assigned to it in section 92A of the Income-tax Act, 1961
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Source :-
ü CGST Act, 2017
ü Study Material WIRC
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