Reema Sondhi

Reema SondhiIn this article, I have tried to cover various scenarios in a Tabular form as to when goods & services shall become taxable under the New Model GST law.

It is worthwhile to note that the existing indirect taxes like Excise, VAT and Service Tax are taxable as per the relevant provisions of their specific acts/statues which define different scenarios & determinants as to when the goods or services should be taxable.

E.g. Excise duty becomes payable at the time when goods are removal of goods from the factory;

VAT becomes payable when the title in the goods is transferred to another person;

Service Tax basis the provisions of Point of Taxation Rules.

GST shall be subsuming all such indirect taxes and hence it is imperative to understand various scenarios & determinants when the Goods or Services shall be taxable under the new GST Regime. The answer lies in understanding Time of Supply Rules for Goods & Services as specified in Chapter IV of Draft GST Law. These rules shall be the determinants of the point in time when the goods & services shall become taxable.

Below is the simplified tabular representation of the point in time when the goods and services shall become taxable as per the new GST regime.

POT GST Goods  POT GST Services

 Conclusion:  It is worthwhile here to note that scenarios here like Date of Receipt of goods / services in books of accounts by Recipient which were never in the existing indirect tax laws shows clearly the intention of government to increasing the tax base & making it a form of advance tax.

However question arises what happens if the receipt of goods shown by recipient is at an X price & the final Invoice has X+Y at the final price. Will there be some sort of adjustments? Further what scenarios does S13 (2) (c) cover’s for Non Continuous Supply of Services. These questions are yet to be answered.

Hopefully, these will get clarified subsequently.

Note: – Reliance & reference has been made on Draft GST Law Chapter IV, the contents are subject to change upon the release of the Final draft of Model GST Law.

View GST rate chart here

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5 responses to “Point in Time when Goods / Services shall be taxable under GST”

  1. ANSHUMAN A S says:

    One of the scenarios covered by Section 13(2)(c) is where the service provider has not passed entry for supplying the goods, but the recipient files his GSTR2 declaring Inward supplies.

  2. Reema Sondhi says:

    Hi … Thanks.
    Though the GST Draft Law states that the closing balance of VAT credit & Cenvat Credit will be available & can be adjusted for GST as per Sec 143 (Transitional Provisions), however the manner will be prescribed later on … Hopefully it will be clarified in the coming months.

  3. tanuj says:

    hi your article was informative
    i have a query about GST
    What is the status on old Input credit of VAT under GST.
    for eg. if a dealer has stock with him on 31/3/17, with a vat input of 5%, and suppose GST is applicable from 1/4/17, then how does he do the billing.

    • Achal Lath says:

      Read Transitional Provision ( Chapter 25 sections 141, 142, 143)

    • Reema Sondhi says:

      Hi… Thanks … The transitional provisions S 143 specifies the same …. Though the draft law says that the available Cenvat Credit or VAT available as closing balance will be allowed in GST … the manner in which this will be adjusted is yet to be notified.
      Hopefully it will be clarified in coming months.

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