What is time of supply?

Time of supply is a relevant measure under the GST law for every transaction entered into by the supplier of goods and services. It means the point in time when goods have been deemed to be supplied or services have been deemed to be provided for determining when the taxpayer is liable to pay taxes.

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Time Of Supply of Goods & Services

The time of supply of goods are provided under the section 12 of the GST Act, 2017. Such provisions are-

(1) The liability to pay tax on goods shall arise at the time of supply, as determined in accordance with the provisions of this section

(2) The time of supply of goods shall be the earlier of the following dates, namely:—

a) 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

b) the date on which the supplier receives the payment with respect to the supply:

Provided that where the supplier of taxable goods receives an amount up to one thousand rupees in excess of the amount indicated in the tax invoice, the time of supply to the extent of such excess amount shall, at the option of the said supplier, be the date of issue of invoice in respect of such excess amount. https://alamin.tuf.edu.pk/

(3) In case of supplies in respect of which tax is paid or liable to be paid on reverse charge basis, the time of supply shall be the earliest of the following dates, namely:—

a) the date of the receipt of goods; or

b) the 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; or

c) the date immediately following thirty days from the date of issue of invoice or any other document, by whatever name called, in lieu thereof by the supplier:

Provided that where it is not possible to determine the time of supply under clause (a) or clause (b) or clause (c), the time of supply shall be the date of entry in the books of account of the recipient of supply.

(4) In case of supply of vouchers by a supplier, the time of supply shall be—

a) the date of issue of voucher, if the supply is identifiable at that point; or

b) the date of redemption of voucher, in all other cases.

(5) Where it is not possible to determine the time of supply under the provisions of sub-section (2) or sub-section (3) or sub-section (4), the time of supply shall––

a) in a case where a periodical return has to be filed, be the date on which such return is to be filed; or

b) in any other case, be the date on which the tax is paid.

(6) 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.

Section 13 of the GST act provided provisions related to TOS of services. Such provisions are-

(1) The liability to pay tax on services shall arise at the time of supply, as determined in accordance with the provisions of this section.

(2) The time of supply of services shall be the earliest of the following dates, namely:—

a) the date of issue of invoice by the supplier, if the invoice is issued within the period prescribed under sub-section (2) of section 31 or the date of receipt of payment, whichever is earlier; or

b) the date of provision of service, if the invoice is not issued within the period prescribed under sub-section (2) of section 31 or the date of receipt of payment, whichever is earlier; or

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

Provided that where the supplier of taxable service receives an amount up to one thousand rupees in excess of the amount indicated in the tax invoice, the time of supply to the extent of such excess amount shall, at the option of the said supplier, be the date of issue of invoice relating to such excess amount.

(3) In case of supplies in respect of which tax is paid or liable to be paid on reverse charge basis, the time of supply shall be the earlier of the following dates, namely:––

the 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; or

the date immediately following sixty days from the date of issue of invoice or any other document, by whatever name called, in lieu thereof by the supplier:

Provided that where it is not possible to determine the time of supply under clause (a) or clause (b), the time of supply shall be the date of entry in the books of account of the recipient of supply:

Provided further that in case of supply by associated enterprises, where the supplier of service is located outside India, the time of supply shall be the date of entry in the books of account of the recipient of supply or the date of payment, whichever is earlier.

(4) In case of supply of vouchers by a supplier, the time of supply shall be––

a) the date of issue of voucher, if the supply is identifiable at that point; or

b) the date of redemption of voucher, in all other cases.

(5) Where it is not possible to determine the time of supply under the provisions of sub-section (2) or sub-section (3) or sub-section (4), the time of supply shall––

a) in a case where a periodical return has to be filed, be the date on which such return is to be filed; or

b) in any other case, be the date on which the tax is paid.

(6) 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. https://cleartax.in/s/time-supply-goods-gst

TOS under Reverse Charge

TOS under Reverse Charge under GST is discussed under the following heads-

TOS in case of goods

In case of reverse charge, the time of supply for goods shall be the earliest of the following dates:

• the date of receipt of goods
• the date of payment
• the date immediately after 30 days from the date of issue of an invoice by the supplier

If it is not possible to determine the TOS, the time of supply shall be the date of entry in the books of account of the recipient.

TOS in case of services

In case of reverse charge, the time of supply shall be the earliest of the following dates:

• The date of payment
• The date immediately after 60days from the date of issue of invoice by the supplier

If it is not possible to determine the time of supply, the time of supply shall be the date of entryin the books of account of the recipient. 

Who should pay GST under the reverse charge mechanism (RCM)?

As per provisions of GST law, the person supplying the goods must mention in the tax invoice whether tax is payable under the RCM. 

The following points should be kept in mind while making GST payments under RCM: 

• The recipient of goods or services can avail of the ITC on the tax amount paid under RCM only if such goods or services are used for business or furtherance of business. 
• A composition dealer should pay tax at the normal rates and not the composition rates while discharging liability under RCM. Also, they are ineligible to claim any input tax credit of tax paid. 
• GST compensation cess can apply to the tax payable or paid under the RCM.

Mechanism of TOS

Time of supply is a relevant measure under the GST law for every transaction entered into by the supplier of goods and services. It means the point in time when goods have izquierdainutil been deemed to be supplied or services have been deemed to be provided for determining when the taxpayer is liable to pay taxes.

TOS under normal charge

The time of supply of goods shall be the earlier of the following dates:  

(a) The date of issuing of invoice (or the last day by which invoice should   have been issued) 

OR 

(b) The date of receipt of payment

TOS under reverse charge

Reverse charge means the liability to pay tax is by the recipient of goods/services instead of the supplier. In case of reverse charge, the time of supply shall be the earliest of the following dates— 

(a) the date of receipt of goods 

OR

(b) the date of payment 

OR 

(c) the date immediately after 30 days from the date of issue of invoice by the supplier (60 days for services). 

If it is not possible to determine the TOS under (a), (b) or (c), the TOS shall be the date of entry in the books of account of the recipient. 

Full Notes

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See Also

GST

Input Tax Credit

Indirect Tax