TIME OF SUPPLY

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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Also Study:Also Study:Also Study:Also Study:
GST and its featuresHistory of GSTAdvantages of GSTDisadvantages of GST
Constitutional aspects of GSTLiability of tax payerObjectives of GSTIGST
CGSTGST CouncilUTGSTSGST
Levy and collection of GSTComposition LevyOnline GST RegistrationExemptions under GST
Reverse Charge in GSTTaxable supplyTime of supplyValue of supply
Place of supplyInter-state supplyIntra-state supplyComposite supply
Mixed supply Composite and mixed supplyOnline payment of GSTHow to Claim TCS in GST
How to claim TDS in GSTInput tax credit under GSTTax InvoiceDebit Note in GST
Credit Note in GSTRevised Invoice in GSTSupplementary InvoiceE-Way bill in GST
GST ReturnsGSTN (Goods and Service Tax Network)GST Suvidha ProviderGST Portal

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