Time of Supply

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Time of Supply

Determination of time of Supply of goods

Section 12 prescribes the time of supply of goods in different situations. The Section prescribes for determination of time of supplies in following transactions of supply of goods:

  • In all general cases of supply of goods (other than those specified below)
  • In case where tax is payable under reverse charge
  • In cases of supply by voucher
  • In cases of enhanced value receipt in form of interest, late fee or penalty for delayed payment of any consideration

    • Time of Supply of goods in all cases other than those specified

      The Time of Supply of goods in all cases (other than those specifically provided in Para 5.2.2., 5.2.3., 5.2.4.) shall be the earliest of the following dates, namely,-

      • the date of issue of invoice by the supplier or
      • the last date on which he is required, under sub-section (1) of section 31, to issue the invoice with respect to the supply; or
      • the date on which the supplier receives the payment with respect to the supply.
      • Date of Payment

        “The date on which the supplier receives the payment” shall be the date as either of the following, whichever is earlier:-

        a. payment is entered in supplier’s books of account

        b. the date on which the payment is credited to supplier’s bank account

        Time of Supply of Services

        Time of Supply of Services can be divided under four broad heads:-

        • General Supply of service
        • Service under Reverse Charge
        • Supply of vouchers
        • Cases not falling in above
        Time of Supply of Services
        Time of Supply of Services

         

    • General Supply of Services

      As per Sub-section (2) of section 13 of CGST Act, the time of supply of goods shall be the either of the following, whichever is earlier:—

      a) In case invoice received within prescribed time, earlier of –

      • the date of issue of invoice by the supplier or
      • the date of receipt of payment

      b) In case invoice is not received within prescribed time, earlier of-

      • the date of provision of service
      • the date of receipt of payment

      In a case where the provisions of clause (a) or clause (b) do not apply, the date on which the recipient shows the receipt of services in his books of account.

      Time of Supply in case of Partial payment

      There can be sitautions where the invoice is not issued or paid in full or advance is not received for the complete amount of invoice. In such cases, Explanation 1 to Section 12 provides that, “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.for eg., a person has agreed to supply Table of Rs 200,000 and against which he has received an advance of Rs 50,000. Thus, the time of Supply shall be the advance being date of payment and prior to date of invoice. Also, the time of supply for advance shall be of Rs 50,000 only and not the entire agreed consideration of Rs 2 Lakhs.

    • Determination of time of Supply in case of Rate change

      Notwithstanding anything contained above, section 14 provides for the time of supply, in cases where there is a change in the effective rate of tax (CERT) in respect of supply of goods and / or services. The time of supply shall be determined in the following manner, namely:-

      (a) in case the taxable service has been provided before the change in effective rate of tax

      (b) in case the taxable service has been provided after the change in effective rate of tax

      Summary of the provisions is as follows:

      Supply Issue of invoice Receipt of payment Time of supply
      Before the change in rate of tax After the change in rate of tax After the change in rate of tax Date of receipt of payment, or date of issue of invoice, whichever is earlier
      Before the change in rate of tax Before the change in rate of tax After the change in rate of tax Date of issue of invoice
      Before the change in rate of tax After the change in rate of tax Before the change in rate of tax Date of receipt of payment
      After the change in rate of tax Before the change in rate of tax After the change in rate of tax Date of receipt of payment
      After the change in rate of tax Before the change in rate of tax Before the change in rate of tax Date of receipt of payment, or date of issue of invoice, whichever is earlier
      After the change in rate of tax After the change in rate of tax Before the change in rate of tax Date of issue of invoice

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