For calculating and discharging tax liability its important for knowing date when the tax liability is arising this means the date in which it has occurred. In GST its called Time of Supply. GST has given different provisions for determining the time of supply of goods and time of supply. Section 12,13 and 14 of CGST Act provides the provisions which are related to time of supply and according to Section 20 of IGST Act,2017 these provisions are applicable to Inter State supply placeable for an Combined Tax.
Date of Receipt of Payment
The Date of Receipt of Payment means the date on which the payment is entered in the books of accounts of supplier or on the date when the payment has been credited to the bank account whichever is done before.
Time of Invoice for Supply
According to Section 31 of CGST Act, 2017 CGST invoice for supply of the goods is required to be issued before or at the time of removing the goods of supply to recipient where supply involves movement of goods. Although in some cases invoice is needed for issuing before or at the time of delivery of the goods or making the goods available to recipient.
Same, an invoice for the supply of services is required to be issued before or after provision of the service but not after thirty days from date of provision of service.
Time of Supply of Goods or The Default Rule
Whichever happens earlier:-
- Date of issue of invoice by supplier. If invoice is not issued, then last date when the supplier is bound to issue an invoice with respect to supply.
- Date in which supplier gets the payment.
Section 148 of CGST Act, 2017 provides power to the government by recommendation from the GST council notifying particular class of registered persons and special procedures followed by such person which include that regarding registration, furnishing the returns, paying tax of such individuals. By utilising the rights provided in the section government on the advice of GST Council has notified the individuals as the class of person who shall pay GST on outward supply of goods at the time of supply which is provided in clause (a) of sub section (2) of section 12.
Which in respect to supply of goods by normal registered persons, the time of supply will be issuing of the invoice or on the last date in which the invoice is issued in terms of the Section 31. So, all taxpayers are exempted from paying GST at the time of receipt of advance in relation to supply of goods. This entire GST should be payable only when invoice is issued for such supply of the goods. This procedure is applicable to the class of persons even in the incidents coming under the Section 14 of the Act.
Time of Supply of Services or The Default Rule
Whichever happens earlier:-
- If Invoice is issue in the legally provided period under Section 31(2) of the CGST Act 2017 read with Rule No 47 of CGST Act, 2017 (which is thirty days from the date of supply of Service0 then date of issue of the invoice by the supplier or the date of receipt then this date of issue of invoice by supplier or the date of this receipt of payment, whichever happens earlier.
- If Invoice is not issued in the legal manner given under the Section 31(2) of CGST Act, 2017 then the date of provision or date of receipt of payment whichever happens earlier.
- The Date on which the recipient shows the receipt of the service in the books of account.
Supply of services should be deemed to have been made to an extent which it covers the invoice or the payment. In spite of the fact the tax payable on any advance which is received for supply of service, however for convenience of trade its provided that if any supplier of taxable service receives any amount upto Rs,1000 in excess of amount which is indicated on the tax invoice then supplier has the option for taking the date of issue of invoice in accordance with such supply as time of supply.
Time of supply of goods when tax is paid on reverse charge basis
Whichever Occurs First:-
- Date of receipt of goods
- Date on which payment enters in books of accounts of recipient or date on which payment is debited in the bank account.
- The date which immediately follows 30 days from date of issue of invoice or any other document in place of invoice by supplier.
Although if its not possible for determining the time of supply in the aforesaid manner then time of supply is the date of entry in the books of accounts of the recipient of supply.
Time of supply in case of supply of vouchers
Definition of Voucher is given in CGST Act,2017 as a tool where an obligation for accepting it as a consideration or part of consideration for a supply of goods or services or both and where the goods and services are both to be supplied or identities of the potential supplier are either indicated on instrument or in related documents, this includes the terms and condition for using such instrument. Vouchers are used for transaction in Indian Economy. A shopkeeper can issue voucher for particular supply which means supply is identifiable at time of issuing of the voucher. Trade Parlence these are known as single purpose voucher. Time of Supply in case of single purpose voucher is where supply is identifiable at the time of issuance of voucher is date of voucher. Although, in other cases of supply vouchers, time of supply is the date of redemption of voucher.
Time of supply of goods or services (Residual provisions)
If its not possible in determining the time of supply under aforesaid provision, the time of supply is:-
- The due date of filing the return, where periodical return is to be filed.
- Date of payment of tax in other cases
Time of Supply of Goods and Services in relation to addition in value of Supply by way of Interest, Late Fees or Penalty
Time of Supply when related to addition in value of supply by way of interest, late fee or penalty for the delayed payment shall be a consideration on the date in which the supplier has received an additional amount.
Date of Receipt of Payment in case of Change in Rate of Tax
Generally the date of receipt of payment is the date of credit in bank account of recipient of payment or date on which the payment is entered in books of account whichever is earlier. Although, date of credit in bank account is required if such credit is after four working days from date of change in Rate of Tax.
