Time of Supply & Service under GST

CMA Ramesh Krishnan , Last updated: 14 October 2016
Share

Major indirect tax reformation is in full swing and it is going to gear up from 1st April 2017, till now empowered committee proposals and draft rules and formats and several frequently asked questions has been published by the government to help us to transformation process from the current indirect tax system to GST module smoothly. Currently we have different indirect taxes and the taxable event and taxable time is differs depends on the act. Now the current GST module consolidated and proposed different taxable time and taxable event under chapter IV of the model GST act. This article discussed about the same.

For supply of Goods:

If the goods can be removed physically then

Event	Taxable date
The date of removal of goods by the supplier to the recipient	Whichever is earlier
The date of supplier issues the invoice for the supply
The date of supplier receives the payment for the supply
The date of receipt of the goods in the books of recipient

If the goods cannot be removed physically or assembled and installed or supplied to his agent or his principal then

Event	Taxable date
The date on which goods are made available to the recipient Meaning of made available is when the goods are placed at the disposal of the recipient	Whichever is earlier
The date of supplier issues the invoice for the supply
The date of supplier receives the payment for the supply
The date of receipt of the goods in the books of recipient

Events depends on the invoice and payment shall deemed to have been made to the extent it is covered by the invoice or the payment, which means the taxability covered only to the extent of invoice amount raised or payment received.

It is further clarified that the payment received by the supplier is the date on which the payment entered in his books of accounts or the date on which the payment is credited to his bank account whichever is earlier.

If the continuous supply involved then

Event	Taxable date
Where successive statements of accounts or successive payments are involved	The time of supply shall be the date of expiry of the period to which such successive statements of accounts or successive payments relate
If there are no successive statements of account	Date of issue of Invoice or date of receipt of payment whichever is earlier

If the supplies are covered under reverse charge basis taxation then

Event	Taxable date
Date of receipt of goods	Whichever is earlier
Date on which payment is made
Date of receipt of invoice
Date of debit in the books of account

Goods supplied on sale or return basis or Sale on approval basis

Taxable date would be the date on which actual sales taken place or 6 month from the date of removal from actual supplier whichever is earlier
All other cases which is not covered above all 5 categories

Taxable date would be
In case where a periodical return has to be filed - date on which the periodical return would be filed
Other cases – the date on which CGST/SGST is paid

For supply of Services:

a. In case invoice has issued within the prescribed period - Date of issue of invoice or date of receipt of payment whichever is earlier
b. In case invoice not been issued within the prescribed period- Date of completion of service or date of receipt of payment whichever is earlier
c. In any other case – Date on which the recipient shows the receipt of service in his books of accounts

In case of continuous supply of service

Contract terms: where the due date of payment is ascertainable from the contract, the date on which the payment is liable to be made by the recipient of service, whether or not any invoice has been issued or any payment has been received by the supplier of service

No clarity in contract: In case no clarity in payment terms in the contract then the date of invoice issued or payment received whichever is earlier

If the payment is depends on event: Where the payment is linked to the completion of an event, the time of completion of event.

If the services are covered under reverse charge basis taxation then

Event	Taxable date
Date of receipt of services	Whichever is earlier
Date on which payment is made
Date of receipt of invoice
Date of debit in the books of account

In case supply of services ceases under a contract before completion of supply, such services shall be deemed to have been provided at the time when the supply ceases.

All other cases of supply of services which is not covered above categories

Taxable date would be
In case where a periodical return has to be filed - date on which the periodical return would be filed
Other cases – the date on which CGST/SGST is paid

Change in rates – in case of supply of services

Services	Invoice	Payment	Tax rate applicability date
Services provided before change of rate	Issued after change of rate	Received after change of rate	Invoice issue date or payment date whichever is earlier
	Issued before change of rate	Received after change of rate	Invoice issue date
	Issued after change of rate	Received before change of rate	Payment received date
Services provided after change of rate	Issued before change of rate	Received after change of rate	Payment received date
	Issued after change of rate	Received before change of rate	Invoice issue date
	Issued after change of rate	Received after change of rate	Invoice issue date or payment date whichever is earlier