TIME OF SUPPLY
Time of supply means the point in time when goods/services are considered supplied’. When the seller knows the ‘time’, it helps him identify due date for payment of taxes.
CGST/SGST or IGST must be paid at the time of supply.
The rules mentioned under GST Act regarding time of supply are as follows:
TIME OF SUPPLY OF GOODS
Time of supply of goods is earliest of:
1. Date of issue of invoice.
2. Last date on which invoice should have been issued.
3. Date of receipt of advance/ payment*.
For example:
Mr. X sold goods to Mr. Y worth Rs 1,00,000. The invoice was issued on 15th January. The payment was received on 31st January. The goods were supplied on 20th January.
Time of supplies is earliest of –
1. Date of issue of invoice = 15th January
2. Last date on which invoice should have been issued = 20th January
Thus the time of supply is 15th January.
If an advance of Rs 50,000 is received by Mr. X on 1st January?
The time of supply for the advance of Rs 50,000 will be 1st January (since the date of receipt of advance is before the invoice is issued). For the balance Rs 50,000, the time of supply will be 15th January.
TIME OF SUPPLY FOR SERVICES
Time of supplies of services is earliest of:
1. Date of issue of invoice
2. Date of receipt of advance/ payment.
3. Date of provision of services (if invoice is not issued within prescribed period)
Example:
Mr. A provides services worth Rs 20000 to Mr. B on 1st January. The invoice was issued on 20th January and the payment for the same was received on 1st February.
Firstly check if the invoice was issued within the prescribed time or not. The prescribed time is 30 days from the date of supply i.e. 31st January. The invoice was issued on 20th January. This means that the invoice was issued within a prescribed time limit.
The time of supplies will be earliest of –
1. Date of issue of invoice = 20th January
2. Date of payment = 1st February
This means that the time of supplies of services will be 20th January.
TIME OF SUPPLY UNDER REVERSE CHARGE
In case of reverse charge the time of supply for service receiver is earliest of:
1. Date of payment.
2. 30 days from date of issue of invoice for goods (60 days for services)
For example:
M/s ABC Pvt. Ltd undertook service of a director Mr. X worth Rs. 50,000 on 15th January. The invoice was raised on 1st February. M/s ABC Pvt Ltd made the payment on 1st May.
The time of supply, in this case, will be earliest of –
1. Date of payment = 1st May
2. 60 days from date of date of invoice = 2nd April
Thus, the time of supply of services is 2nd April.
TIME OF SUPPLY FOR VOUCHERS
Vouchers are an instrument where there is an obligation to accept:
- It as consideration
- Part consideration for a supply of goods or services
For vouchers, the time of supplies is the date of issue of voucher, if the supply is identifiable at that point. Else, the time of supplies for vouchers is the date of redemption of voucher.
OTHER TYPES OF SUPPLY
In case, it is not possible to determine the time of supply under any of the methods mentioned above, the time of supply would be determined as under:
- In a case where a periodical return has to be filed, the date on which such return is to be filed.
- In any other case, be the date on which the tax is paid.
Time of Supply for Interest, Late fee or Penalty
The time of supply for any interest, late fee or penalty for delayed payment as an addition consideration for the supplies made, is the date on which the supplier receives such addition in value.
Time of Supply in case Change in rate of tax
When there is a change in rate of tax, the time of supply shall be determined in the following manner:
1. Supply is made before the change in rate of tax
- Invoice is issued and payment is also
received after the change in rate of tax – the time of supply will be the date
of invoice or the date of payment – whichever is earlier. - Invoice is issued before the change in rate
of tax and payment is received after the change in rate of tax – the time of
supply will be the date of invoice. - Payment is received before the change in rate
of tax and the invoice is issued after the change in rate of tax – the time of
supply will be the date of receipt of payment.
2. Supply is made after the change in rate of tax
- Payment is received after the change in rate
of tax but the invoice is issued before the change in rate of tax – the time of
supply will be date of receipt of payment. - Invoice is issued and payment is also
received before the change in rate of tax – the time of supply shall be the
date of receipt of payment or data of invoice – whichever is earlier. - Invoice is issued after the change in rate of
tax but the payment is received before the change in rate of tax – the time of
supply shall be date of invoice.
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