Article explains When Taxpayer is Liable to pay GST, Time of Supply under Forward Charge, Time of Supply when GST is payable under Reverse Charge basis under section 9(3) and 9(4), Time of Supply in case of issue of Voucher, Time of Supply in case of issue of Residual Case and Time of Supply when there is an addition in value by way of interest, late fee/ penalty for delayed payment of consideration.

Basis Sub-Section Time of Supply of Goods Time of Supply of Services
Liability to pay GST

 

1 Arises at the time of supply as determined under sub-section 12(2) – 12(5) Arises at the time of supply as determined under sub-section 13(2) – 13(5)
Time of Supply under Forward Charge 2 Supply by a taxable person other than composite dealers:

A. The date on which the invoice is issued by the supplier or last date as specified u/s 31(1) *

Supply by composite dealers: Earliest of

A. The date on which the invoice is issued by the supplier or last date as specified u/s 31(1) *

B. The date on which payment is received by the supplier**

* Section 31(1): Time limit for issuing invoice shall be Before or at the time of:

> Removal of goods for supply to the recipient, which involves the movement of goods or

> Delivery of Goods or making available thereof to the recipient, in any other case.

** Date on which payment is received by the supplier shall be Earliest of:

> The date on which supplier records the transaction in his books of accounts or

> The date on which the payment is credited in supplier’s Bank account

Additional Points:

A. Supply shall be deemed to have been made to the extent covered in the invoice or payment, as the case may be, and not for the whole supply.

B. If a supplier receives up to ₹ 1000 over the invoice value, TOS for such excess amount shall be the date of invoice in respect of such payment.

C. The time limit for issuing an invoice in certain cases:

> Continuous supply of goods: invoice should be issued before or at the time of issuance of periodical statement/ receipt of periodical statement Section 31(4).

> Sale or Approval: invoice has to be issued before or at the time of supply or 6 months from the date of removal, whichever is earlier Section 31(7).

Invoice is not issued within the time limit as specified u/s 31(2)* TOS shall be Earliest of:

A. The date on which the supplier has issued an invoice or

B. The date on which payment is received**

Invoice is not issued within the time limit as specified u/s 31(2)*TOS  shall be Earliest of:

A. The date on which service is provided or

B. The date on which payment is received**

Where the date is unascertainable from the above events:

A. Time of supply shall be the date on which the recipient records the receipt of service in his books of accounts.

*Section 31(2): Time limit for issuing invoice shall be Before or after providing the service but within:

> 45 days in case of Insurance companies/ Banking companies and Financial Institutions including NBFCs.

> 30 days in the case of other taxable persons.

** Date on which payment is received by the supplier shall be Earliest of:

> The date on which supplier records the transaction in his books of accounts or

> The date on which the payment is credited in supplier’s Bank account

Additional Points:

A. Supply shall be deemed to have been made to the extent covered in the invoice or payment, as the case may be, and not for the whole supply.

B. If a supplier receives up to ₹ 1000 over the invoice value, TOS for such excess amount shall be the date of invoice in respect of such payment.

C. The time limit for issuing an invoice in certain cases:

> Continuous supply of services:

The invoice should be issued either on/ before the due date for payment or before/at the time when the supplier of services receives the payment or on/before the date of completion of the event when payment is linked to the completion of the event. Section 31(5).

> In case of cessation of supply of services before the completion, the invoice should be issued at the time when the supply ceases Section 31(6).

Time of Supply when GST is payable under Reverse Charge basis u/s 9(3) and 9(4) 3 TOS shall be Earliest of:

A. The date on which the goods are received,

B. The date of payment* or

C. The 31st day from the date of receiving the invoice or any other document in place of invoice.

Where the date is unascertainable from the above events:

A. Time of supply shall be the date on which the recipient records the receipt of service in his books of accounts.

* Date of Payment shall be Earliest of:

> The date on which the payment is recorded in the recipients’ books of accounts or

> The date on which payment is debited in the recipients’ books of accounts.

TOS shall be Earliest of:

A. The date of payment* or

B. The 61st day from the date of receiving the invoice.

Where service is provided by associated enterprise** located outside India TOS Shall be the Earliest of:

A. The date of payment or

B. The date of entry in the recipients’ books of accounts.

Where the date is unascertainable from the above events:

A. Time of supply shall be the date on which the recipient records the receipt of service in his books of accounts.

* Date of Payment shall be Earliest of:

> The date on which the payment is recorded in the recipients’ books of accounts or

> The date on which payment is debited in the recipients’ books of accounts.

** Associate enterprise shall have the meaning as defined u/s 92A of Income Tax Act, 1961: 

Voucher 4 A. Where the supply of goods could be identified at the time of issue of voucher TOS shall be the date of issue of voucher.

B. In other Cases, TOS shall be the date of redemption of voucher.

A. Where the supply of service could be identified at the time of issue of voucher TOS shall be the date of issue of voucher.

B. In other Cases, TOS shall be the date of redemption of voucher.

Residual Case 5 When the transaction does not fall under any of the above provisions:

A. Periodical return is required to be filed: The date which such periodical return is filed.

B. Other cases: The date on which tax is paid.

When the transaction does not fall under any of the above provisions:

A. Periodical return is required to be filed: The date which such periodical return is filed.

B. Other cases: The date on which tax is paid.

 Addition in value 6 TOS when there is an addition in value by way of interest, late fee/ penalty for delayed payment of consideration shall be the date on which the supplier receives such addition in value. TOS when there is an addition in value by way of interest, late fee/ penalty for delayed payment of consideration shall be the date on which the supplier receives such addition in value.

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Qualification: Student - CA/CS/CMA
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Location: Chennai, Tamil Nadu, IN
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