Time of Supply under GST (Section 12, 13, 14 of CGST Act, 2017)
INTRODUCTION:-
GST has to pay if there is supply. In order to calculate and discharge tax liability it is important to know the date when the tax liability arises i.e. the date on which the charging event has occurred, In GST law it is known as time of supply. GST law provide three different provision to determine time of supply of goods (Section 12), Time of supply of service (Section 13), Time of supply where there is a change in the rate of tax in respect of goods or services or both (Section 14).
DEFINITION:-
1) Voucher:- As per the Section 2(118), “voucher” means an instrument where there is an obligation to accept it as consideration or part consideration for a supply of goods or services or both and where the goods or services or both to be supplied or the identities of their potential suppliers are either indicated on the instrument itself or in related documentation, including the terms and conditions of use of such instrument.
2) Point of time when supplier receives the payment or date of receipt of payment:- The phrase “the date on which supplier receives the payment” or “the date of receipt of payment” means,
(a) The date on which payment is entered in books of accounts of the supplier or
(b) The date on which the payment is credited to his bank account.
whichever is earlier.
TIME OF ISSUE OF INVOICE FOR SUPPLY:-
1) For Goods:- As per section 31 of the CGST Act, 2017 an invoice for supply of goods needs to be issued,
(a) Movement of goods involve:-Before or at the time of removal of goods for supply to the recipient.
(b) Movement of goods does not involve:- Before or at the time of delivery of goods or making available goods to the recipient.
2) For Service:- As per section 31 of the CGST Act, 2017 an invoice for supply of service needs to be issued, before or within thirty days from the date of provision of service.
TIME OF SUPPLY OF GOODS (Section 12 of CGST Act, 2017):-
1) Time of supply of goods shall be earliest of the following dates,
(a) Date of issue of invoice by the supplier. If invoice is not issued, then the last date on which supplier is legally bound to issue the invoice with respect to the supply.
(b) Date on which supplier receives the payment.
However as per the notification No. 40/2017-Central Tax, Dt. 13.10.2017, A Registered person (not opting to pay GST under composition levy under section 10 of CGST Act, 2017) whose aggregate tournover in the preceding financial year did not exceed 1.5 Cr. as the class of persons to pay GST when the invoice is issued for such supply of goods. Hence registered person whose aggregate turnover is less than 1.5 Cr. is not required to pay GST on advance receipt of payment.
Further new notification No. 66/2017-Central Tax, Dt. 15.11.2017, give supercession on notification No. 40/2017-Central Tax, Dt. 13.10.2017, and notifies the registered person who did not opt for the composition levy under section 10 of the said Act as the class of persons to pay GST only when the invoice is issued for such supply of goods. Hence now registered person is not required to pay GST on advance receipt of payment irrespective of aggregate turnover.
2) Time of supply of goods when tax is to be paid on reverse charge basis shall be earliest of the following dates,
(a) Date of receipt of goods.
(b) Date immediately following 30 days from the date of issue of invoice or any other legal document in lieu of invoice by the supplier.
(c) Date on which payment is entered in the books of accounts of the recipient or the date on which the payment is debited in his bank account, whichever is earlier.
However, if it is not possible to determine the time of supply in aforesaid manner then the time of supply is the date of entry of the transaction in the books of accounts of the recipient of supply.
3) Time of supply in case of supply of vouchers shall be,
(a) Date of issue of voucher, if the supply is identifiable at that point.
(b) Date of redemption of voucher, in all other cases.
Explanation:- Identifiable supply means supply is indicated on vouchers itself and use against such supply only. (Eg. Voucher of television or spa or hair cut etc.)
4) The time of supply to the extent it relates to an addition in the value of supply by way of interest, late fee or penalty for delayed payment of any consideration shall be the date on which the supplier receives such addition in value.
TIME OF SUPPLY OF SERVICE (Section 13 of CGST Act, 2017):-
1) Time of supply of services,
(a) If the invoice is issued within the legally prescribed period under section 31(2) of the CGST Act, 2017 then earliest of the following dates,
i) Date of issue of invoice by the supplier.
ii) Date of receipt of payment.
(b) If the invoice is not issued within the legally prescribed period under section 31(2) of the CGST Act, 2017 then earliest of the following dates,
i) Date of provision of service.
ii) Date of receipt of payment.
However if time of supply of service is not determine by above two provision then time of supply of service shall be date on which recipient shows the receipt of service in his books of account
Although tax is payable on any advance received for a supply of services, however for the convenience of trade it is provided that if a supplier of taxable services receives an amount up to Rs. 1000/- in excess of the amount indicated on the tax invoice, then the supplier has an option to take the date of issue of invoice in respect of such supply as time of supply.
For example, if a supplier has received an amount of Rs. 1500/- against an invoice of Rs.1100/- on 25.07.2017 and date of invoice of next supply to the said recipient is 14.08.2017, then he has option to treat the time of supply w.r.t Rs. 400/- either as 25.07.2017 or 14.08.2017.
2) Time of supply of services when tax is to be paid on reverse charge basis shall be earliest of the following dates,
(a) Date of payment as entered in the books of account of the recipient or the date on which the payment is debited in his bank account, whichever is earlier.
(b) Date immediately following 60 days from the date of issue of invoice or any other legal document in lieu of invoice by the supplier.
However, if it is not possible to determine the time of supply in aforesaid manner then the time of supply is the date of entry of the transaction in the books of accounts of the recipient of supply.
3) Time of supply of services in case of supply by Associated Enterprises located outside India shall be earliest of the following dates,
(a) Date of entry in the books of account of the recipient.
(b) Date of payment.
4) Time of supply in case of supply of vouchers shall be,
(a) Date of issue of voucher, if the supply is identifiable at that point.
(b) Date of redemption of voucher, in all other cases.
Explanation:- Identifiable supply means supply is indicated on vouchers itself and use against such supply only. (Eg. Voucher of television or spa or hair cut etc.)
5) The time of supply to the extent it relates to an addition in the value of supply by way of interest, late fee or penalty for delayed payment of any consideration shall be the date on which the supplier receives such addition in value.
TIME OF SUPPLY WHERE THERE IS A CHANGE IN THE RATE OF TAX IN RESPECT OF GOODS OR SERVICES OR BOTH (Section 14 of CGST Act, 2017):-
1) In case the goods or services or both have been supplied before the change in rate of tax,
(a) Invoice issued:-After
(b) Payment Received:-After
(c) Time of Supply:-Date of receipt of payment or the date of issue of invoice, whichever is earlier.
(d) Rate of Tax:-New Rate
(a) Invoice issued:-Before
(b) Payment Received:-After
(c) Time of Supply:-Date of Invoice
(d) Rate of Tax:-Old rate
(a) Invoice issued:-After
(b) Payment Received:-Before
(c) Time of Supply:-Date of receipt of payment
(d) Rate of Tax:-Old rate
2) In case the goods or services or both have been supplied after the change in rate of tax,
(a) Invoice issued:-Before
(b) Payment Received:-Before
(c) Time of Supply:-Date of receipt of payment or the date of issue of invoice, whichever is earlier
(d) Rate of Tax:-Old Rate
(a) Invoice issued:-Before
(b) Payment Received:-After
(c) Time of Supply:-Date of receipt of payment
(d) Rate of Tax:-New Rate
(a) Invoice issued:-After
(b) Payment Received:-Before
(c) Time of Supply:-Date of Invoice
(d) Rate of Tax:-New Rate
Provided that the date of receipt of payment shall be the date of credit in the bank account if such credit in the bank account is after four working days from the date of change in the rate of tax.
However, the special procedure for payment of tax by suppliers of goods (other than composition dealers) notified by Government vide notification no. 66/2017-Central Tax dated 15.11.2017 under section 148 of the CGST Act, 2017, will continue to govern even in the above situation. In a nutshell, suppliers of goods other than composition dealers will have to pay tax at the time of issue of invoice only.
GST has to pay if there is supply. In order to calculate and discharge tax liability it is important to know the date when the tax liability arises i.e. the date on which the charging event has occurred, In GST law it is known as time of supply. GST law provide three different provision to determine time of supply of goods (Section 12), Time of supply of service (Section 13), Time of supply where there is a change in the rate of tax in respect of goods or services or both (Section 14).
DEFINITION:-
1) Voucher:- As per the Section 2(118), “voucher” means an instrument where there is an obligation to accept it as consideration or part consideration for a supply of goods or services or both and where the goods or services or both to be supplied or the identities of their potential suppliers are either indicated on the instrument itself or in related documentation, including the terms and conditions of use of such instrument.
2) Point of time when supplier receives the payment or date of receipt of payment:- The phrase “the date on which supplier receives the payment” or “the date of receipt of payment” means,
(a) The date on which payment is entered in books of accounts of the supplier or
(b) The date on which the payment is credited to his bank account.
whichever is earlier.
TIME OF ISSUE OF INVOICE FOR SUPPLY:-
1) For Goods:- As per section 31 of the CGST Act, 2017 an invoice for supply of goods needs to be issued,
(a) Movement of goods involve:-Before or at the time of removal of goods for supply to the recipient.
(b) Movement of goods does not involve:- Before or at the time of delivery of goods or making available goods to the recipient.
2) For Service:- As per section 31 of the CGST Act, 2017 an invoice for supply of service needs to be issued, before or within thirty days from the date of provision of service.
TIME OF SUPPLY OF GOODS (Section 12 of CGST Act, 2017):-
1) Time of supply of goods shall be earliest of the following dates,
(a) Date of issue of invoice by the supplier. If invoice is not issued, then the last date on which supplier is legally bound to issue the invoice with respect to the supply.
(b) Date on which supplier receives the payment.
However as per the notification No. 40/2017-Central Tax, Dt. 13.10.2017, A Registered person (not opting to pay GST under composition levy under section 10 of CGST Act, 2017) whose aggregate tournover in the preceding financial year did not exceed 1.5 Cr. as the class of persons to pay GST when the invoice is issued for such supply of goods. Hence registered person whose aggregate turnover is less than 1.5 Cr. is not required to pay GST on advance receipt of payment.
Further new notification No. 66/2017-Central Tax, Dt. 15.11.2017, give supercession on notification No. 40/2017-Central Tax, Dt. 13.10.2017, and notifies the registered person who did not opt for the composition levy under section 10 of the said Act as the class of persons to pay GST only when the invoice is issued for such supply of goods. Hence now registered person is not required to pay GST on advance receipt of payment irrespective of aggregate turnover.
2) Time of supply of goods when tax is to be paid on reverse charge basis shall be earliest of the following dates,
(a) Date of receipt of goods.
(b) Date immediately following 30 days from the date of issue of invoice or any other legal document in lieu of invoice by the supplier.
(c) Date on which payment is entered in the books of accounts of the recipient or the date on which the payment is debited in his bank account, whichever is earlier.
However, if it is not possible to determine the time of supply in aforesaid manner then the time of supply is the date of entry of the transaction in the books of accounts of the recipient of supply.
3) Time of supply in case of supply of vouchers shall be,
(a) Date of issue of voucher, if the supply is identifiable at that point.
(b) Date of redemption of voucher, in all other cases.
Explanation:- Identifiable supply means supply is indicated on vouchers itself and use against such supply only. (Eg. Voucher of television or spa or hair cut etc.)
4) The time of supply to the extent it relates to an addition in the value of supply by way of interest, late fee or penalty for delayed payment of any consideration shall be the date on which the supplier receives such addition in value.
TIME OF SUPPLY OF SERVICE (Section 13 of CGST Act, 2017):-
1) Time of supply of services,
(a) If the invoice is issued within the legally prescribed period under section 31(2) of the CGST Act, 2017 then earliest of the following dates,
i) Date of issue of invoice by the supplier.
ii) Date of receipt of payment.
(b) If the invoice is not issued within the legally prescribed period under section 31(2) of the CGST Act, 2017 then earliest of the following dates,
i) Date of provision of service.
ii) Date of receipt of payment.
However if time of supply of service is not determine by above two provision then time of supply of service shall be date on which recipient shows the receipt of service in his books of account
Although tax is payable on any advance received for a supply of services, however for the convenience of trade it is provided that if a supplier of taxable services receives an amount up to Rs. 1000/- in excess of the amount indicated on the tax invoice, then the supplier has an option to take the date of issue of invoice in respect of such supply as time of supply.
For example, if a supplier has received an amount of Rs. 1500/- against an invoice of Rs.1100/- on 25.07.2017 and date of invoice of next supply to the said recipient is 14.08.2017, then he has option to treat the time of supply w.r.t Rs. 400/- either as 25.07.2017 or 14.08.2017.
2) Time of supply of services when tax is to be paid on reverse charge basis shall be earliest of the following dates,
(a) Date of payment as entered in the books of account of the recipient or the date on which the payment is debited in his bank account, whichever is earlier.
(b) Date immediately following 60 days from the date of issue of invoice or any other legal document in lieu of invoice by the supplier.
However, if it is not possible to determine the time of supply in aforesaid manner then the time of supply is the date of entry of the transaction in the books of accounts of the recipient of supply.
3) Time of supply of services in case of supply by Associated Enterprises located outside India shall be earliest of the following dates,
(a) Date of entry in the books of account of the recipient.
(b) Date of payment.
4) Time of supply in case of supply of vouchers shall be,
(a) Date of issue of voucher, if the supply is identifiable at that point.
(b) Date of redemption of voucher, in all other cases.
Explanation:- Identifiable supply means supply is indicated on vouchers itself and use against such supply only. (Eg. Voucher of television or spa or hair cut etc.)
5) The time of supply to the extent it relates to an addition in the value of supply by way of interest, late fee or penalty for delayed payment of any consideration shall be the date on which the supplier receives such addition in value.
TIME OF SUPPLY WHERE THERE IS A CHANGE IN THE RATE OF TAX IN RESPECT OF GOODS OR SERVICES OR BOTH (Section 14 of CGST Act, 2017):-
1) In case the goods or services or both have been supplied before the change in rate of tax,
(a) Invoice issued:-After
(b) Payment Received:-After
(c) Time of Supply:-Date of receipt of payment or the date of issue of invoice, whichever is earlier.
(d) Rate of Tax:-New Rate
(a) Invoice issued:-Before
(b) Payment Received:-After
(c) Time of Supply:-Date of Invoice
(d) Rate of Tax:-Old rate
(a) Invoice issued:-After
(b) Payment Received:-Before
(c) Time of Supply:-Date of receipt of payment
(d) Rate of Tax:-Old rate
2) In case the goods or services or both have been supplied after the change in rate of tax,
(a) Invoice issued:-Before
(b) Payment Received:-Before
(c) Time of Supply:-Date of receipt of payment or the date of issue of invoice, whichever is earlier
(d) Rate of Tax:-Old Rate
(a) Invoice issued:-Before
(b) Payment Received:-After
(c) Time of Supply:-Date of receipt of payment
(d) Rate of Tax:-New Rate
(a) Invoice issued:-After
(b) Payment Received:-Before
(c) Time of Supply:-Date of Invoice
(d) Rate of Tax:-New Rate
Provided that the date of receipt of payment shall be the date of credit in the bank account if such credit in the bank account is after four working days from the date of change in the rate of tax.
However, the special procedure for payment of tax by suppliers of goods (other than composition dealers) notified by Government vide notification no. 66/2017-Central Tax dated 15.11.2017 under section 148 of the CGST Act, 2017, will continue to govern even in the above situation. In a nutshell, suppliers of goods other than composition dealers will have to pay tax at the time of issue of invoice only.
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