In this article, you will get a fair idea of timeline for imposing CGST/SGST on goods/services respectively. Section 12 and section 13 of the act rule point of taxation under GST act.
Time of supply of goods Section 12
The liability to pay CGST / SGST on the goods shall arise at the time of supply as determined in terms of the provisions of section 12.
The time of supply of goods shall be the earliest of the following dates, namely,-
(a) (i) the date on which the goods are removed by the supplier for supply to the recipient, in a case where the goods are required to be removed or (ii) the date on which the goods are made available to the recipient, in a case where the goods are not required to be removed (goods are physically not capable of being moved or are supplied in assembled or installed form or are supplied by the supplier to his agent or his principal); or
(b) The date on which the supplier issues the invoice with respect to the supply; or
(c) The date on which the supplier receives the payment with respect to the supply(entered in his books of accounts or the date on which the payment is credited to his bank account, whichever is earlier); or
(d) The date on which the recipient shows the receipt of the goods in his books of account.
It is to be noted that
In simple words: earlier of
►Date of removal of goods
► Date on which goods are made available to the recipient (where goods are not required to be removed)
► Date of issuance of invoice
► Date of receipt of payment by supplier
► Date on which recipient shows receipt of goods in his books of account
Time of supply of services Section 13
The liability to pay CGST/SGST on services shall arise at the time of supply, as determined in terms of the provisions of section 13.
The time of supply of services shall be:-
(a) the date of issue of invoice or the date of receipt of payment, whichever is earlier, if the invoice is issued within the prescribed period; or
(b) the date of completion of the provision of service or the date of receipt of payment, whichever is earlier, if the invoice is not issued within the prescribed period; or
(c) 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 (b) do not apply.
In simple words: earlier of
► Date of issuance of invoice
► Date of receipt of payment
► Date of completion of service (if invoice is not issued within the prescribed period)
► Date on which recipient reflects the receipt of services in his books of account.
In case of continuous supply of services, the time of supply shall be –
(a) where the due date of payment is ascertainable from the contract, the date on which the payment is liable to be made by the recipient of service, whether or not any invoice has been issued or any payment has been received by the supplier of service;
(b) where the due date of payment is not ascertainable from the contract, each such time when the supplier of service receives the payment, or issues an invoice, whichever is earlier;
(c) where the payment is linked to the completion of an event, the time of completion of that event;
In case of supplies in respect of which tax is paid or liable to be paid on reverse charge basis, the time of supply shall be the earliest of the following dates, namely-
(a) the date of receipt of services, or
(b) the date on which the payment is made, or
(c) the date of receipt of invoice, or
(d) the date of debit in the books of accounts.
Explanation- “the date on which the payment is made” shall be the date on which the payment is entered in the books of accounts of the recipient or the date on which the payment is debited in his bank account, whichever is earlier.
In a case where the supply of services ceases under a contract before the completion of the supply, such services shall be deemed to have been provided at the time when the supply ceases.
Where it is not possible to determine the time of supply of services in the manner specified above, the time of supply shall
(a) in a case where a periodical return has to be filed, be the date on which such return is to be filed; or (b) in any other case, be the date on which the CGST/SGST is paid.
(Have questions? Feel free to seek consultancy from Prudent AdvisO Services; mail at prudentadviso@gmail.com/one stop solution for your business/special support to start-ups)
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