Time of Supply Under GST
Time of supply manner the point in time when goods/services are deemed to be supplied/rendered. It allows us to examine the cost of tax, worth, and due dates for fee of taxes.
The liability to pay CGST / SGST will arise at the time to give as determined for items and offerings. There are separate provisions for time of providing for goods and time of supply for offerings.
To investigate time of giving of goods & services, four categories are provided as beneath:
- Time of delivery of items & offerings beneath forwarding charge.
- Time of supply of goods & services below Reverse charge.
- Time of giving in case of supply of Vouchers.
- Residuary Clause.
1.Time of Supply of Goods & Services under Forwarding Charge:
Some Important Points:
(a) Time of Issue of Invoice for Goods:
- If the movement of goods involved in supply than before or at the time of removal of goods.
- If no movement of goods involved in supply than before or at the time of delivery of goods or making available to the recipient.
- If the continuous supply of goods For Exa. Supply of Oil etc. than earliest of the following:
♦ The time when each statement is issued.
♦ The time when each payment is received. - If goods sent for approval than earliest of the following:
♦ The time when it becomes known that supply is taken place.
♦ Six months from the date of removal.
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(b) Time of Issue of Invoice for Services:
- Before or after the provision of service but within a period prescribed:
- 30 days in all cases except for banking and financial institutions from the date of supply of services.
- 45 days in case of banking and financial institutions from the date of supply of services
- In case of continuous supply of services:
- Due date of payment can be identified from the contract : The invoice will be issued before or after the payment is to be made by the recipient but within 30 or 45 days of due date of payment.
- Due date of payment is cannot be identified from the contract : The invoice shall be issued before or after each time when the supplier of service receives the payment but within 30 or 45 days of receipt of payment.
- Payment is linked to the completion of an event: The invoice shall be issued before or after the time of completion of that event but within 30 or 45 days of completion of the event.
- Supply of services ceases under a contract before the completion of the supply: The invoice shall be issued at the time when the supply ceases and such invoice shall be issued to the extent of the service provider before stopping.
- The supply shall be deemed to have been made to the extent it is covered by the invoice or, as the case may be, the payment.
- Date of Receipt of the payment by supplier: Payment is entered into the books of the account or credited in his bank account whichever is earlier.
- Optional Time of supply: If amount up to Rs. 1,000 in excess of invoice amount is received then the supplier may take the time of supply is the date of invoice issued for such excess or advance received.
- If the invoice is not issued and date of payment or date of completion of provision of service are also not ascertainable than the time of supply shall be the date on which the recipient shows the receipt of services in his books of accounts.
Examples:
Q.1
Mr. A, a manufacturer, sold goods to Mr. B, wholesaler, and issued an invoice for the sale on 01st August 2017. Now, determine the time of supply of goods for the following cases:
- Mr. A removes the goods for delivery to Mr. B on 16th August 2017.
- Mr. B collects the goods from premises of Mr. A on 10th August 2017.
- Mr. B made full payment on 26th July 2017.
- Mr. B credited the payment in bank account of Mr. A on 28th July 2017 for 3/4thof goods, Mr. A recorded the same as receipts in his books on 3rd August 2017. The goods were dispatched on 5th August 2017 from the warehouse.
A.1
1. 1st August 2017 is the time of supply of goods
i.e. Earlier of the following:
– Date of Invoice – 1st August 2017 or
– Date on which invoice is required to be issued – 16th August 2017.
2. 1st August 2017 is the time of supply of goods
i.e. Earlier of the following:
– Date of Invoice – 1st August 2017 or
– Date on which goods is delivered – 10th August 2017.
3. 26th July 2017 is the time of supply of goods
i.e. Earlier of the following:
– Date of Invoice – 1st August 2017 or
– Date of Payment – 26th July 2017.
4. The time of supply of goods for 3/4th of the goods will be 28th July 2017 as the payment has been made prior to the date of invoice and the time of supply of goods will be 1st August 2017 for remaining 1/4th The late recording of receipt in the books by Mr. A will have no impact.
2.Time of Supply of Goods & Services under Reverse Charge:
If the time of supply cannot be determined with the help of above provisions then the time of supply shall be the date on which entry in the books of the recipient of goods & services is made.
Examples:
Q.1
Mr. A, a registered dealer received goods from Mr. B, an unregistered dealer. Mr. B issues invoice on 1st July 2017. Now, determine the time of supply of goods in following cases:
(a) A received goods on 15th July 2017, payment of which is not made yet.
(b) Mr. A received goods on 3rd August 2017 & made payment for the same on 4th August 2017.Mr. A made payment on 8th July and received goods on the same date.
(c) Mr. A made payment on 8th July and received goods on the same date.
(d) Mr. A received goods on 10th July 2017 & made payment for the same on 9th July 2017.
A.1
(a) 15th July 2017 will be the time of supply of goods.
Earliest of the following:
Receipt of Goods = 15th July 2017
Date of Payment = NA
30 days from the date of invoice = 30th July 2017
(b) 30th July 2017 will be the time of supply of goods.
Earliest of the following:
Receipt of Goods = 3rd August 2017
Date of Payment = 4th August 2017
30 days from the date of invoice = 30th July 2017
(c) 8th July 2017 will be the time of supply of goods.
Earliest of the following:
Receipt of Goods = 8th July 2017
Date of Payment = 8th July 2017
30 days from the date of invoice = 30th July 2017
(d) 9th July 2017 will be the time of supply of goods.
Earliest of the following:
Receipt of Goods = 10th July 2017
Date of Payment = 9th July 2017
30 days from the date of invoice = 30th July 2017
3.Time of Supply of Vouchers for Goods & Services:
4.Residuary Clause:
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