4th April 2017
GST is believed to be the biggest tax reform in the field of Indirect tax regime especially, which is going to be the reality with effect from 1st April, 2017. This can also be judged from the government’s actions because the government is very much serious about its timely implementation and therefore issuing notification and rules to complete all these work before the deadline.
By now, we all have known one thing that GST is simply consolidation of all indirect taxes present as of now in terms of state level VAT, Service tax, Octri and so on. Since GST will deal with both i.e. taxability of goods as well as service, therefore, it is very much important to delineate how goods and services shall be taxable, when the taxability arises, when the tax to be paid and so on. Of all these questions, one major question is timing of supply of services or goods. It is the time or we can say the date from which we can interpret the rules like when the tax or interest to be paid. Unless we know the timing of supply of goods or services, we can not understand the others operational aspects of GST laws. The term supply under the GST plays an important role because it’s the sole determinant to decide the taxable event. This can be better understood if you recall the term POT (Point of Taxation) under extant Service Tax Laws. POT is nothing but the point of time, when a transaction is to be taxed. Time of supply rules is related to POT to some extent. Therefore, let’s understand how to determine the time in case of supply of goods:
Time of Supply in case of Goods:
1. Normal Supply:
CGST/SCGST and IGST on the goods shall be due at the earliest of the following dates:
2. For continuous supply of goods:
When successive payments are involved: Time of supply shall be the date of expiry of the period to which such successive payments relate;
No successive payments are involved: Date of issue of invoice or date of receipt of payment, whichever is earlier.
3. For supply of goods under reverse charge:
Let’s first understand the term reverse charge. Under the reverse charge mechanism, liability to deposit tax is on the service recipient instead of service provider. Time of supply shall be the date which is earliest of the following:
From the above points one conclusion we can draw that taxability and collection provisions in respect of goods are going to be changed drastically changed under the GST regime. Further, taxable event under GST shall depend upon numbers of events such as date of removal, payment date, date of receipt of goods etc.
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