Time of Supply of Services under GST

By Registrationwala

30th November -0001

 

According to GST Law, unlike merchandise, on account of services, the time of supply is controlled by the reality whether the invoice for supply of services has been issued inside the recommended period or past such endorsed time period. The time of supply fixes the point when the liability to charge GST emerges. It additionally shows when a supply is considered to have been made. The CGST/SGST Act gives individual time of supply to merchandise and services.

Determining Time of Supply

The time of supply of services shall be the earlier of the following dates:-

(a) The date of issuing invoice (or the last day by which invoice should have been issued)
             OR
(b)The date of receipt of payment
     -whichever is earlier

In the event that the provider of taxable service gets a sum up to Rs. 1000 rupees in abundance of invoice sum, the time of supply for the additional sum shall be the date of issue of invoice (at the choice of the provider).

For conditions (a) and (b)- The supply should be accepted to have been made to the extent it is secured by the invoice or the remuneration (by and large).

For condition (b)- the date of receipt of remuneration should be prior of-

(i) The date on which he entered the remuneration in his books

OR

(ii) The date on which the remuneration is credited to his bank account

For Instance,

Date of invoice 15th May 2018

Date of receipt of payment 10th July 2018

Date when supplier recorded receipt in books 11th July 2018

Time of supply will be 15th May 2018

Time of supply under turn reverse charge

Reverse charge implies the obligation to pay tax is by the beneficiary of merchandise/administrations rather than the provider. In the event of reverse charge, the time of supply should be the soonest of the accompanying dates—

(a) The date of payment

OR

(b) The date immediately after SIXTY (60) days from the date of issue of invoice by the provider (30 days for merchandise)

On the off chance, it is impractical to decide the time of supply under (a), (b) or (c), the time of supply should be the date of entry in the books of record of the receiver of service.

For proviso (a)- the date of payment might be prior to-

1. The date on which the beneficiary entered the remuneration in his books

OR

2. The date on which the remuneration is debited from his bank account

In case the provider is situated outside India

If there should arise an occurrence of 'associated enterprises', where the provider of service is situated outside India, the time of supply might be-

(a) the date of entry in the books of record of the beneficiary

OR

(b) The date of payment

- Whichever is prior

Instance for reverse charge:

1. Date of payment 15th July 2018

2. Date of invoice 1st July 2018

3. Date of entry in books of receiver 18th July 2018

Time of supply of service 15th May 2018

If for some reason time of supply could not be determined supply under (a), (b) or (c) then it would be 18th July 2018 i.e., date of entry in books

Time of supply for vouchers

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

When time of supply cannot be determined

If it is not possible to determine the time of supply by the above provisions, then it will be-
1. The date on which a periodical return has to be filed
OR
2. The date on which the CGST/SGST is paid, in any other case.

In case of Continuous Supply of Service

(a) where the due date of instalment is ascertainable from the agreement, the invoice might be issued before or after the payment is liable to be made by the beneficiary yet inside a period recommended for this benefit regardless of whether any instalment has been received by the supplier of the service;

(b) where the due date of payment is not ascertainable from the agreement, the invoice should be issued before or after each such time when the provider of service gets the instalment within a period endorsed in this behalf;

(c) where the instalment is connected to the finishing of an event, the invoice should be issued before or after the time of completion of that occasion within a period recommended for this behalf.

 For a situation where the supply of service stops under an agreement before the finishing of the supply, the invoice might be issued when the supply stops and such invoice shall be issued to the extent of the supply affected before such cessation.

 Conclusion

In GST administration, the tax collection event will be soonest of the dates as given above. The different events like issuing invoice/making payment in case of supply of goods/administrations or completion of event in case of supply of administration setting off the tax levy, affirms that the Government wants to guarantee tax is gathered at the most punctual purpose of time. This will be a new idea for the present VAT and Central Excise taxpayers.

There are numerous parameters in deciding "time" of supply. Along these lines, organizations will confront a test to maintaining and accommodating between revenue as per financials and as per GST.

 

 

Time of Supply of Services under GST

-0001-11-30