As per Section 13 of Central Goods & Services Act, 2017, the liability to pay tax arises at the time of supply, time of supply is determined as per the below provisions:
If the invoice is issued within 30/45 days (Note 4) from the date of supply of service:
If the invoice is not issued within 30/45 days (Note 4) from the date of supply of service:
Where the above provisions do not apply:
Note 1: When the supplier receives an amount of up to Rs.1000 in excess of an invoice value, the time of supply shall be, for the excess amount, at the option of supplier, can be the date of invoice for such excess amount.
Note 2: For the purpose of the above provision, ‘supply’ shall be deemed to have been made to the extent; it is covered by the invoice, or as the case may be, the payment.
Note 3: The date of receipt of payment shall be, the date, when the payment is entered in the supplier’s books of accounts or the date, when the payment is credited in his bank account, whichever is earlier.
Note 4: As per Rule 47 of CGST Act, invoice should be issued within 30 days from the date of supply of services. If the supplier is an insurer or a banking company or a financial institution, including a non-banking financial company, the invoice or any document in lieu thereof should be issued within 45 days.
Where the supplier is an insurer or a banking company or a financial institution including a non-banking financial company, or a telecom operator or any other class of supplier of services as may be notified by the Government on the recommendations of the Council, makes taxable supplies of services between distinct persons, may issue the invoice before or at the time of recording the supply in their books of accounts or before the expiry of the quarter during which the supply was made.
The time of supply shall be earlier of the following dates:
Time of supply for vouchers for services, will be either of the following:
Note: If the time of supply is not possible to be determined based on the above provisions, the time of supply shall be the date on when the periodical return has to be filed, in all other cases, the date on which the tax is paid for such supply.
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.
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
2. Supply is made after the change in rate of tax
Provided that the date of receipt of payment shall be the date of credit in the bank account if such credit in the bank account is after four working days from the date of change in the rate of tax
Note: The date of receipt of payment shall be 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 in his bank account – whichever is earlier.
Author: M. Udaya Chandran, M.Com, Email: firstname.lastname@example.org, Mobile: +919791164482, Place: Chennai, Tamilnadu.