In my previous article I have discuss Time of supply of Goods ……..Now let us discuss Time of supply of services-
Time of supply of services is prescribed as earlier of –
- Date of issue of Invoice
- Date of receipt of payment
Date of issue of Invoice – As per provision of Section 31 of CGST ACT 2017 –
Tax Invoice should be issued within 30 days from the date of supply of services. In case of Banking Company, time period is 45 days from date of supply of services.
In the invoice is issued after 30 days, the time of supply will be earlier of date of completion of service or date of payment. If none of above situations are applicable, time of supply of services will be date when the recipient shows the receipt of services in his books of account.
Take an example-
1. Mr P provides repair services to Mr Q – Rs 50000
08.11.2022 – Advance received – RS 10000
10.11.2022 – Services completed by Mr P
16.12.2022 – Receives balance payment Rs 40000 and recorded in books
Time of supply if MrP issues the Invoice on-
A. 15.11.2022
In above case – Rs 10000- Time of supply will be 08.11.2022 as date of receipt of payment is earlier of date of issue of Invoice.
For the balance of payment the time of supply will be 15.11.2022 as Invoice issued with in 30 days of supply of services.
B. 15.12.2022
> For Rs 10000 – Time of supply will be 08.11.2022 as date of receipt of payment is earlier of date of issue of Invoice.
> For balance payment – Time of supply will be – 10.11.2022 as completion of service will be earlier of date of issue of invoice and date of payment.
Continuous supply of services- Continuous supply of services means-
– The services should be provided continuously or on recurrent basis.
– The contract period should be exceeding three months.
– The payment obligations should be periodical.
Date of issuance of Invoice in respect of continuous supply of services as per provisions of section 31(5)-
1. Where the due date of payment is ascertainable from the contract, the invoice will be issued on or before the due date of payment.
2. Where the due date of payment is not ascertainable from the contract, the invoice will be issued before or at the time when the supplier of services receives the payment
3. When the payment is linked to the completion of an event, the invoice will be issued on or before the date of completion of that event
Let’s take an example-
Mr X signed a agreement with Mr Y for constructing flat for Rs 150, 00,000.- (F.Y 2020-21)
Ist case–Equal Instalments to be paid at the end of every quarter-
| Date of completion of service | Date of Invoice | Date of payment | Amount |
| 30.09.2021 | 03.10.2021 | 15.10.2021 | 5000000 |
| 31.12.2021 | 02.12.2021 | 03.02.2022 | 5000000 |
| 31.03.2022 | 10.04.2022 | 20.03.2022 | 5000000 |
Time of supply will be –
| Date of completion of service | Date of Invoice | Date of payment | Amount | TIME OF SUPPLY |
| 30.09.2021 | 03.10.2021 | 15.10.2021 | 5000000 | 30.09.2021 |
| 31.12.2021 | 02.12.2021 | 03.02.2022 | 5000000 | 02.12.2021 |
| 31.03.2022 | 10.04.2022 | 20.03.2022 | 5000000 | 20.03.2022 |
Lets take another example- Due date not ascertainable from the contract,
| Date of completion of service | Date of Invoice | Date of payment | Amount |
| 30.09.2021 | 04.10.2021 | 15.10.2021 | 9000000 |
| 31.12.2021 | 22.01.2022 | 02.01.2022 | 6000000 |
Time of supply will be –
| Date of completion of service | Date of Invoice | Date of payment | Amount | Time of supply |
| 30.09.2021 | 04.10.2021 | 15.10.2021 | 9000000 | 04.10.2021 |
| 31.12.2021 | 22.01.2022 | 02.01.2022 | 6000000 | 31.12.2021 |
Time of supply of services – Reverse Charge
Time of supply in case of reverse charge basis will be earlier of date of payment or 61st day from the date of issue of invoice by the supplier. If above dates cannot be determined, then time of supply will be date of recording the supply in books of accout of recipient.
For example-
X (GTA) (Registered supplier) provides transport services to Y- which fall under reverse charge basis—
10.04.2022 – The services are provided to Mr Y
12.04.2022- Mr X issues an invoice to Mr Y
10.07.2022 – Payment is made by Mr Y through cheque and recorded in his books of accounts.
15.07.2022 – Payment gets debited from Mr Y bank account
Time of supply will be –
Date of payment – 10.07.2022
Date immediately following 60 days from the date of issue of Invoice – 12.06.2022
Therefore, the time of supply will be 12.06.2022
Queries/doubts related to above mailed at mamta0581@gmail.com
Author Bio
What is Time of Supply in case of construction services for builder
1. Payment plan is linked to completion of event and advances not received ?
2. Payment plan is not linked to completion of event or equal installment ?