The liability to pay GST arises on the supply of goods or services. As supply involves various elements such as purchase order, shipping of goods, delivery of goods, provision of services, etc.., it is important to know at what time/event the liability to levy GST on Supply of goods or services arises, which shall be discussed in this article.
Time of Supply
Time of supply determines the point of time on which liability to pay CGST and SGST/UTGST (on intra-state supply) and IGST (on Interstate supply) arises. Under the GST Act, separate provisions have been provided to determine the time of supply for Goods and time supply for services.
Time of Supply for Goods
Section 12 of the Goods and Services act determines the Time of Supply of Goods in the following cases
- Supply of Goods taxable under forwarding charge
- Supply of Goods taxable under Reverse charge
- Supply of vouchers used for payment of Goods.
Supply of Goods taxable under forwarding charge
As per section 12(2) of the GST act, Time of Supply of Goods taxable under forwarding charge shall be the earlier of following dates
- Date of issue of Invoice or last date to issue invoice under section 31
or
- Date of payment as recorded in the books of the supplier.
or
- Date on which payment is credited to the bank account of the supplier.
Note: No GST will be payable on the advance amount received for the supply of Goods.
Supply of Goods taxable under Reverse charge
As per section 12(3) of the GST act, Time of Supply of Goods taxable under reverse charge shall be earlier of the following dates
- The date on which Goods received.
or
- Date of payment as recorded in the books of account of the recipient.
or
- The date on which payment is debited from the bank account of the recipient.
or
- 31st day from the date of issuance of the Invoice by the supplier.
Note: if aforesaid dates are unascertainable, Time of Supply shall be the date of entry of Goods in the books of account of the recipient)
Supply of vouchers used for payment of Goods
As per section 12(4) of the GST act, Time of Supply of Vouchers used for payment of Goods shall be earlier of the following dates
- Date of receipt/issuance of the voucher (if supply is identifiable at the point of time of voucher issue)
or
- The date on which voucher is redeemed (if supply is not identifiable at the point of time of voucher issue)
Time of Supply for Services
Section 13 of the Goods and Services act determines the Time of Supply for Services in the following cases
- Supply of Services taxable under forwarding charge
- Supply of Services taxable under Reverse charge
- Supply of vouchers used for payment of Services
Supply of Services taxable under forwarding charge
As per section 13(2) of the GST act, Time of Supply of Services taxable under forwarding charge shall be earlier of the following dates
- Date of Invoice issue (if invoice issued within the time specified u/s 31(ie..,30days))
or
- Date of provision of Service (if the invoice is not issued within the time specified u/s 31(ie..,30days))
or
- Date of payment as recorded in the books of accounts of the supplier.
or
- The date on which payment is credited to the bank account of the supplier.
Note: if aforesaid dates are unascertainable, Time of Supply shall be the date of receipt of services in the books of account of the recipient)
Supply of Services taxable under Reverse charge
As per section 13(3) of the GST act, Time of Supply of Services taxable under reverse charge shall be earlier of the following dates
- Date of payment as recorded in the books of account of the recipient.
or
- The date on which payment is debited from the bank account of the recipient.
or
- 61st day from the date of issuance of the Invoice by the supplier.
Note: if aforesaid dates are unascertainable, Time of Supply shall be the date of entry of services in the books of account of the recipient)
Supply of vouchers used for payment of Services
As per section 13(4) of the GST act, Time of Supply of Vouchers used for payment of Services shall be earlier of the following dates
- Date of receipt/issuance of the voucher (if supply is identifiable at the point of time of voucher issue)
or
- The date on which voucher is redeemed (if supply is not identifiable at the point of time of voucher issue)