The Liability to pay tax on goods shall arise at the time of supply as determined in the terms of the provisions of the Section 12.
Before we start the topic Time of Supply under GST Act, 2017, we need to understand section 31 and Section 12 must be read with Section 31, which prescribes in detail the date on which tax invoice for a supply must be issued in various situations.
Time limit for issuance of invoice in respect of goods :-
- Supply of Goods:-
Before or at the time of removal of goods where movement of goods is involved.
OR
Before or at the time of making available thereof to the recipient where movement of goods is not involved.
- Continuous supply of goods:-
Before or at the time statement of accounts or successive payment is issued, whichever is earlier.
- Goods sent on approval basis:-
Before or at the time of supply
OR
6 months from the date of removal of goods, whichever is earlier
Time limit for issuance of invoice in respect of services
- Supply of Services :-
45 days from the date of supply of services in the case of Insurer and Banks etc.
AND
30 days from the date of supply of services in any other types of services like contract services and legal services.
In case of cessation of supply of services invoice to be issued when supply ceases.
- Continuous Supply of Services :-
- If due date of payment is ascertainable from contract then invoice shall be issued on or before due date of payment.
- If due date is payment is not ascertainable from contract then invoice shall be issued on or before the date when supplier receives payment.
- If payment is linked to completion of event then invoice to be issued on or before the date of completion of that event.
Time of Supply in case of Goods :-
- In Case of Forward Charge Mechanism
Earlier of the Followings-
-
- Date of Invoice;
- Date up to which invoice is required to be issued as read u/s 31;
- Date of Payment;
Here Date of Payment should be taken, Earlier of Payment credited in bank or Entered in books of accounts.
- In Case of Reverse Charge Mechanism
Earlier of the Followings-
-
- Date of Receipt of Goods;
- Date of Payment;
- 31st day from the date of invoice is issued by supplier;
- Vouchers Exchangeable for Goods
- Where supply is identifiable: – Date of Issue of voucher is deemed to be the time of supply.
- Where supply is not identifiable: – Date of Redemption of voucher is deemed to be the time of supply.
- Residual Cases :-
- If return is filed, then the due date of return, and
- In any other cases, When the date on which tax is paid.
Other Important Points:-
1. No GST is applicable on advances received for supply of goods under Forward Charge.
2. In case of reverse charge, if time of supply cannot be determined, in that case it will be- Date of entry in the books of accounts of recipient of supply.
3. Addition in value by way of interest, Late fees, Penalty for delayed payment- Date on which supplier receives such addition in value.
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