As we all are aware that it is vital time to all the person of India to know the exact date of point of taxation under the GST Laws. Everyone is eager to know on which date CSGT, SGST and/or UTGST and IGST shall be payable and how he done the several compliances under the GST Laws.
I have prepared a detailed explication on the TIME OF SUPPLY OF GOODS / SERVICES which may help to all of you.
TIME OF SUPPLY OF GOODS:
According to Sub-Section 2 of Section 12 of CGST, the time of supply of Goods shall be the earlier of the following dates-
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TIME OF SUPPLY (UNDER FORWARD CHARGE MECHANISM) |
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| Date of issue of invoice by the supplier or the last date on which he is required, to issue the invoice (under section 31) with respect to the supply |
OR |
Date on which the supplier receives the payment with respect to the supply |
| Due date for issue of invoice by the supplier u/s 31:
A. Before or at the time of –Removal of Goods for supply to the recipient, where the supply involves movement of goods, or B. Before or at the time of – Delivery of Goods OR Making Available thereof to the recipient, in any other case C. Goods sent or taken on approval basis for sale or return – Earlier of Time at which it becomes to known that the supply has been taken place OR 6 months from date of removal D. Notified Categories of supplies – Time to be specified by the Govt. |
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| Exception: when amount in excess of ` 1000 is received, the time of supply in respect of such excess at the option of the supplier shall be the date of such invoice.
Explanation: Date of receipt of payment means – Date on which payment is ENTERED in his books of account OR Date on which payment is CREDITED to his bank account, (whichever is earlier) |
||
Illustration 1: Time of supply of Goods (Case A and B)-
| S.No. | Particulars | Date of Removal | Date of
Invoice |
Date made available to Recipient | Date of receipt of Payment | Time of supply |
| 1 | Supply involves movement of Goods | |||||
| Case-I | 21.04.2017 | 22.04.2017 | 21.04.2017 | 20.06.2017 | 21.04.2017 | |
| Case-II | 21.05.2017 | 20.05.2017 | 26.05.2017 | 10.08.2017 | 20.05.2017 | |
| Case-III | 10.06.2017 | 11.06.2017 | 16.06.2017 | 09.05.2017 | 09.05.2017 | |
| 2 | Case Apart from 1 | NA | 18.05.2017 | 16.05.2017 | 21.07.2017 | 16.05.2017 |
Illustration 2: Time of supply of Goods sent / taken on approval basis or sale / return or similar terms [Read with Section 31(7)] –
| S.No. | Particulars | Date of Removal | Date of receipt by recipient | Date of Approval | Date of expiry of 6 months from the date of removal | Time of supply |
| 1 | Case-I | 10.07.2017 | 20.07.2017 | 11.08.2017 | 09.01.2018 | 11.08.2017 |
| 2 | Case-II | 14.06.2017 | 19.06.2017 | awaited | 13.12.2017 | 13.12.2017 |
Time of supply of Goods under Sub-Section 3 of Section 12 of CGST Act, the time of supply of Goods shall be the earlier of the following dates-
|
Time of Supply (Under Reverse Charge Mechanism) |
|
| Possible to determine the time of supply – under clause (a) or (b) or (c) | Not Possible to determine the time of supply – under clause (a) or (b) or (c) |
| ↓ | ↓ |
| Clause (a) – the date of the receipt of goods
OR Clause (b) – the date on which the payment is made, OR Clause (c) – the date immediately following 30 days from the date of issue of invoice by the supplier or any other documents (Whichever is earlier) |
Date of entry in the books of accounts of the recipient of supply
|
| Explanation: Date of receipt of payment means – Date on which payment is ENTERED in his books of account of the RECIPIENT OR Date on which payment is DEBITED in his bank account, (whichever is earlier) | |
Illustration: – Time of supply of Goods
| S.No. | Particulars | Date of receipt of goods | Date of Payment | Date of issue of Invoice by supplier | Date of entry in BOA of the Recipient | Time of supply |
| 1 | Case-I | 21.04.2017 | 22.04.2017 | 23.04.2017 | 22.04.2017 | 21.04.2017 |
| 2 | Case-II | 21.05.2017 | 20.05.2017 | 26.05.2017 | 20.05.2017 | 20.05.2017 |
| 3 | Case-III (date immediately following 30 days from the date of issue of invoice by the supplier) | 02.07.2017 | 11.07.2017 | 01.06.2017 | 11.07.2017 | 01.07.2017 |
| 4 | Case-IV | NA | NA | NA | 25.06.2017 | 25.06.2017 |
The time of supply of Goods in accordance with the provisions of Sub-Section 4 and 5 of Section 12 of CGST Act:
| TIME OF SUPPLY | |
| U/s 12(4) | U/s 12(5) |
| In case of supply of vouchers | If it is not possible to determine the time of supply under the provisions of sub-section (2), (3) or (4) |
| the date of issue of voucher, if the supply is identifiable at that point
OR the date of redemption of voucher, in all other cases |
in a case where a periodical return has to be filed, the date on which such return is to be filed
OR in any other case, the date on which the CGST/SGST is paid |
The Time of Supply under Sub-Section 6 of Section 12 of CGST Act –
Special charges imposed for delay in payment of consideration will enjoy the facility of time of supply being date of receipt of the charges imposed, that is, cash-basis of payment of GST (Charges such as Interest, late fees or penalty for delayed payment of any consideration).
TIME OF SUPPLY OF SERVICES:
As per Sub-Section 2 of Section 13 of CGST Act, the time of supply of services shall be the earlier of the following dates:
|
Time of Supply (under Forward charge Mechanism ) |
||
| Case I- Clause (a) | Case II- Clause (b) | Case III- Clause (c) |
| When Invoice issued within prescribed time limit U/s 31 | When Invoice not issued within prescribed time limit U/s 31 |
the date on which the recipient shows the receipt of services in his books of account, in a case where the provisions of clause (a) or clause (b) do not apply |
| Date of Invoice
OR Date of Receipt of payment (Whichever earlier) |
Last date on which invoice required to be issued u/s 31
OR Date of Receipt of payment (Whichever earlier) |
|
| Exception: When amount in excess of ` 1000 is received, the time of supply in respect of such excess at the option of the supplier shall be the date of such invoice. | ||
| Explanation: Date of receipt of payment means – Date on which payment is ENTERED in his books of account OR Date on which payment is CREDITED to his bank account, (whichever is earlier) | ||
Illustrations: Time of supply of services – (Considering prescribed time limit for issue of invoice – 30 days as per Invoice Rules)
| S. No. | Situation | Date of Completion of Services | Date of Invoice | Date of receipt of Payment | Time of supply of Services |
| 1 | Invoice issued within prescribed period of completion of service | 16.04.2017 | 20.04.2017 | 28.04.2017 | 20.04.2017 |
| 2 | Invoice issued within prescribed period of completion of service | 30.09.2017 | 01.10.2017 | 24.09.2017 | 24.09.2017 |
| 3 | Invoice issued after the prescribed period of completion of service | 16.04.2017 | 16.08.2017 | 28.05.2017 | 15.05.2017 |
| 4 | Invoice issued after the prescribed period of completion of service | 10.06.2017 | 18.08.2017 | 30.04.2017 | 30.04.2017 |
As per Sub-Section 3 of Section 13 of CGST Act, the time of supply of services shall be on the following dates-
|
TIME OF SUPPLY (UNDER REVERSE CHARGE MECHANISM ) |
||
| Possible to determine the time of supply – under clause (a) or (b) | Not Possible to determine the time of supply – under clause (a) or (b) | In case of Associated Enterprises
(where supplier of service is located outside India) |
| Clause (a)- Date on which payment is made
OR Clause (b) – Immediate date after end of 60 days from the date of issue of invoice (Whichever earlier) |
Date of entry in the books of accounts of the recipient of supply |
Date of entry in the books of accounts of the recipient of supply
OR Date of payment (Whichever earlier) |
| Explanation: Date on which payment is made means:
Date on which payment is ENTERED in books of account of recipient OR Date on which payment is DEBITED to his bank account, (whichever is earlier) |
||
Illustration 1: Time of supply of services – Reverse Charge
| S. No | Particulars | Date of issue of Invoice | Date of Actual Payment | Date of entry in BOA of the Recipient | Time of Supply |
| 1 | Case-I (Payment is made by recipient of services within 60 days of issue of invoice) | 22.06.2017 | 10.05.2017 | 23.06.2017 | 10.05.2017 |
| 2 | Case-II (Payment is not made by recipient of services within 60 days of issue of invoice) | 23.06.2017 | 28.09.2017 | 24.06.2017 | 23.08.2017 |
| 3 | Case-III (TOS is not determined under Case I or Case II) | NA | NA | 25.06.2017 | 25.06.2017 |
| 4 | Case-IV (Associate Enterprises located outside India) | 23.08.2017 | 28.09.2017 | 24.08.2017 | 24.08.2017 |
Illustration 2: Time of supply of services – Reverse Charge
| S. No | Particulars | Non- associated Enterprises | Associated Enterprises located outside India |
| 1 | Date on which payment is entered in books of accounts of recipient | 28.09.2017 | 28.09.2017 |
| 2 | Date on which payment is debited to bank account of recipient | 30.09.2017 | 30.09.2017 |
| 3 | Date of issuance of invoice by supplier | 23.08.2017 | 23.08.2017 |
| 4 | Sixty days from the date of issuing invoice | 21.10.2017 | 21.10.2017 |
| 5 | Date of entry in the books of accounts of the recipient | 24.08.2017 | 24.08.2017 |
| Time of supply | 28.09.2017 | 24.08.2017 |
Under Sub-Section 4 of Section 13 of CGST Act, In case of supply of vouchers, by whatever named called, by a supplier, the time of supply shall be:
|
TIME OF SUPPLY |
||
| the date of issue of voucher, if the supply is identifiable at that point |
OR |
the date of redemption of voucher, in all other cases |
Under Sub-Section 5 of Section 13 of CGST Act (Residuary provision), In case it is not possible to determine the time of supply under the provisions of subsection (2), (3) or (4) the time of supply shall:
|
TIME OF SUPPLY |
||
| in a case where a periodical return has to be filed, the date on which such return is to be filed |
OR |
in any other case, the date on which the CGST/SGST is paid |
Under Sub-Section 6 of Section 13 of CGST Act, Special charges imposed for delay in payment of consideration will enjoy the facility of time of supply being date of receipt of the charges imposed, that is, cash-basis of payment of GST (Charges such as Interest, late fees or penalty for delayed payment of any consideration).
TIME OF SUPPLY U/S 14 OF CGST ACT: Change in Rate of Tax in Respect of Supply of Goods or Services or Both-
| Situation | Before Change (A) | After Change (B) | Time of Supply | Rate of Tax | |
| In case the goods or services or both have been supplied before the change in rate of tax | |||||
| Case-I | Completion | Invoice, Payment | Which is earlier (Column-B) | 18% | |
| Case-II | Completion, Invoice | Payment | Date of issue of Invoice | 12% | |
| Case-III | Completion, Payment | Invoice | Date of receipt of payment | 12% | |
| In case the goods or services or both have been supplied after the change in rate of tax, | |||||
| Case-I | Invoice | Completion, Payment | Date of receipt of payment | 18% | |
| Case-II | Invoice, Payment | Completion | Which is earlier (Column-A) | 12% | |
| Case-III | Payment | Completion, Invoice | Date of issue of Invoice | 18% | |
Proviso: 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. However, it credited in within four working days, then it shall be considered payment receipt before change in rate of tax
Explanation: “the date of receipt of payment” – 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.
Note: Suppose rate of tax before change in rate of tax was 12% and after change, it was 18%.
In case of any further query/clarification, please feel free to contact me at [email protected]. I shall be pleased to clarify any pertinent aspect.
(This article is based on my personal opinion and I will not be responsible for any loss due to follow the above.)
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