GST Time of Supply of Goods Explained

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GST Time of Supply of Goods

The point of taxation is the point in time when goods have been considered to be supplied or the services have been considered to be provided. The point of taxation permits us to determine the rate of the tax, value, and the due dates for the payment of taxes.

Under GST, the point of taxation, that is, the liability to pay the CGST / SGST, will arise at the time of supply as determined for the goods and services. There are separate provisions for the GST time of supply for goods and the GST time of supply for services

How to determine the GST Time of Supply of Goods

The GST time of supply of goods has to be the earlier of the following dates –
(a) The date of issuing of invoice (or the last day by which the invoice should have been issued)
OR
(b) The date of receipt of the payment
-whichever is earlier

If a supplier receives an amount up to Rs. 1000 in excess of the invoice amount then, the time of supply for the extra amount will be the date of issue of the invoice (at the choice of the supplier).

For (a) and (b) – The supply will be assumed to be made to the point where it is covered by the invoice or the payment (as the case may be).

For (b) – the date of receipt of the payment will be earlier of
1. The date on which the payment was entered in the books
OR
2. The date on which payment is credited in to his bank account

For example:

(a) The date of invoice 15th May 2018
(b) the date of receipt of payment 10th July 2018
(c) the date when  the supplier recorded  the receipt in books 11th July 2018
Time of supply shall be 15th May 2018

The GST time of supply of Goods under GST reverse charge

Reverse charge is the liability to pay the tax by the recipient of goods/services instead of the supplier. In a scenario where reverse charge is applicable, the time of supply will be the earliest of the following dates—
(a) Date of receipt of the goods OR
(b) Date of  the payment OR
(c) Date immediately after THIRTY days from the date of issue of the invoice by the supplier (60 days in case of services)

If the GST time of the supply of Goods is not possible to determine under (a), (b) or (c), then the time of supply will be the date of entry in the account books of the recipient.

For clause (b) – the date of payment will be earlier of-
(a) Date on which the recipient entered the payment in the books
OR
(b) Date on which the payment gets debited from his bank account

For example:
(a) The date of receipt of goods 15th May 2018
(b) The date of payment 15th July 2018
(c) The date of invoice 1st June 2018
(d) The date of entry in books of the receiver 18th May 2018
The time of supply of goods 15th May 2018
If for some reason the time of supply couldn’t be determined supply under (a), (b) or (c) then it will be 18th May 2018 i.e., date of entry

The time of supply for vouchers

In case of the supply of vouchers the time of supply is-
(a) The date of issue of the voucher, if the supply can be identified at the particular point OR
(b) The date of redemption of the voucher, in all other cases;

When the time of supply cannot be determined

If the time of supply cannot be determined by the above provisions, then it will be-
(a) The date on which a periodical return has to be filed
or
(b) The date on which the CGST/SGST was paid, in any other case.

In the GST regime, the tax collection event will be the earliest of the dates as given above. Various events like the issuing of the invoice/making of payment in case of supply of goods /services or the completion of an event-in case of supply of service triggering the tax levy, confirms that the Government wants to ensure the tax is collected at the earliest point of time.

This will be a completely a new concept for the current VAT and the Central Excise taxpayers.

There are multiple parameters in determining the ‘time’ of supply. Hence, it will be quite a task for businesses in maintaining and reconciling between the revenue as per financials and as per GST.

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A lawyer with 14 years' experience, Vikram has worked with several well-known corporate law firms before joining Vakilsearch.

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