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Mr. A:- Good Day Sir, how are you?

CA:- Hi Mr. A, I am doing fine, how about you?

Mr. A:- I am doing fine sir. Infact really getting updated on GST now. So today can you please tell me the meaning of Supply under GST?

CA:- Hi Mr. A, Under GST the tax will be levied on the point of supply rather than at the point of sale. Hence, meaning and time of Supply is very important aspect under GST.

The meaning of “Supply” is very wide in GST and it covers all forms of supply of goods or services or both via sale, transfer, barter, exchange, license, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business. Infact there are certain specific transaction without consideration also considered to be supply.

Mr. A:- Oh, so what if I am making a supply from my godown to shop?

CA:- If that transfer is Intra-state then it is not taxable and if the transaction is Inter state then GST will be levied even though this will not involve any payment of consideration.

Mr A:- As you provided that GST will be levied on supply of goods or services, so at what time the supply is being considered to be done?

CA:- Mr A, the mechanism to ascertain time of supply for goods under GST is :

i) The date of issue of invoice or,

ii) The date of receipt of payment  whichever is earlier.

And Time of supply of services will be:

If invoice is issued within due date Earlier of:

i) Date of invoice or

ii) Date of Receipt of payment

If invoice is not issued within due date Earlier of:

i) Date of provision of service or

ii) Date of Receipt of payment

If invoice need not be issued Date entered in recipient’s books

Here, the date of receipt of payment is the earliest of the date on which the payment is entered in the books of accounts of the supplier or the date on which the payment is credited to his bank account.

Further, If an amount upto Rs.1000/- is received in excess of amount in Tax invoice then Time of Supply need not be Date of Receipt. Supplier can even opt Date of Invoice as “Time of Supply“.

Mr A:- OK, suppose if I have received the part amount in advance then?

CA:- In this case the supply will be considered for that part advance amount only for which the payment is received. GST needs to be paid even if you receive the advance amount and did not provided or supplied goods or services yet.

Mr A:- OK, is there is any provision which provides about the exception situation where the time of supply cannot be calculated as above?

CA:- Yes Mr. A. In case time of supply cannot be determined by above methods then time of supply is considered as :

i) Where periodical return needs to be filed, the date of such return, or

ii) in any other case, the date on which tax is paid

Mr A:- OK, is there any special concept also related to supply which I need to know?

CA:- Yes Mr. A. There are two terms used for supply as follows:

Composite supply: It means a supply of two or more products or services bundled together out of which one is Principle product or supply. For example: Packaging items, handling items with goods.

Here, the supply will be considered of principle produce and the tax will be applied accordingly.

Mixed Supply: It means a supply of two or more products or services bundled together with each other in conjunction with each other. For example: Chocolates are packed with canned foods, cold drinks etc.

Here, the supply will be considered of the item which attracts highest rate of tax and the tax will be levied accordingly.

Mr A:- OK, is there anything which specifically not considered as supply?

CA:- Yes Mr. A. Below activities are neither treated as supply of goods nor supply of services:

i) Service by an employee to employer in relation to his/her employment

ii) Services by any Court or Tribunal

iii) Functions performed by MP, MLA or corporator

iv) Services of crematorium, mortuary or burial

v) Sale of Land

Mr A:- OK, Thank you much for clearing the doubts related to time of supply

(MJL & Co, Jaipur, Chartered Accountants, Email- MJLco.Jaipur@gmail.com, Phone No. – 0141-4915113)

Author Bio

Qualification: CA in Practice
Company: M J L & Co
Location: Jaipur, Rajasthan, IN
Member Since: 24 Jun 2017 | Total Posts: 11
M J L & CO is a chartered accountancy firm registered with Institute of Chartered Accountants of India (ICAI) having its head office at Jaipur. We are the team of young and energetic partners having positive attitude to provide expert and professional services with due care of professional ethic View Full Profile

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2 responses to “Goods & Services Tax: Time of Supply”

  1. shivam agrawal says:

    Hello sir
    please provide all aspects related to RCM as given above.

    • mjlcojaipur says:

      Sir,

      Time of supply in case where tax is to be paid on reverse charge basis will be –

      1. In case of Goods, earliest of following:
      i) Date of Receipt of Goods;
      ii) Date of Payment;
      iii) Date immediately following 30 days from date of invoice issued by supplier.

      2. In case of Service, earliest of following:
      i) Date of payment;
      ii) Date immediately following 60 days from date of invoice issued by supplier.

      Where it is not possible to determine the time of supply as above, then it will be the date of entry in the books of account of the recipient of supply.

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