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TIME OF SUPPLY UNDER GST

Supply has been understood to hold the key to the incidence of GST, but it is the ‘time of supply’ that dictates the occasion when this incidence will come to rest. Time of supply of goods/services under GST refers to the point of taxation i.e the date and time on which , the liability to pay tax arises.
 
Section 12 determines the Time of supply of goods and Section 13 determines the time of supply of services.
Time of supply of goods
Time of supply in case of normal supply of goods:
Section 12(2) states that in case of normal supply of goods, time of supply is earliest of the following:
a) the date of issue of invoice by the supplier, or,
b) the last date on which he is required, to issue the invoice with respect to the supply; or
c) 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.
 
*“the date on which the supplier receives the payment” shall be earliest of
 
a)  the date on which the payment is entered in his books of account, or
b)  the date on which the payment is credited to his bank account.
 
Example-
 
(a) Date of invoice 14th May 2019
(b) Date of receipt of payment 13th July 2019
(c) Date when supplier recorded receipt in books 11th July 2019
 
Time of supply will be 14th May 2019
 
Time of supply in case of supply of goods on reverse charge
 
Section 12(3) states that in case of supply of goods on reverse charge, time of supply is earliest of the following:
 
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.
d) In case, it is not possible to determine the time of supply under the above 3 clauses, the time of supply shall be the time of supply shall be date of entry in the books of account of the recipient of supply.
 
Example-
 
(a) Date of receipt of goods 12th May 2019
(b) Date of payment 10th July 2019
(c) Date of invoice 1st June 2019
(d) Date of entry in books of receiver 10th May 2019
 
Time of supply of goods 12th May 2019.
 
If for some reason time of supply could not be determined supply under (a), (b) or (c) then it would be 10th May 2019 i.e., date of entry
 
Time of supply in case of supply of vouchers
 
Section 12(4) states that in case of supply of vouchers, time of supply shall be 
 
a) Is supply is identifiable at that point -  date of issue of the voucher
b) In  all other cases – date of redemption of the voucher.
 
Time of supply – residuary provisions
 
Where it is not possible to determine the time of supply under the provisions of subsection (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.
 
Time of supply in case of interest, late fee or penalty
 
Section 12(6) states , 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.
 
Time of supply of services
 
Time of supply in case of normal supply of service
 
Section 13(2) states the time of supply in case of normal supply of service is as under:
 
a) Invoice issued within time limit – Date of issue of invoice by the supplier or date of receipt of payment*, whichever is earlier.
b) Invoice issued after time limit – Date of provision of service or date of receipt of payment, whichever is earlier.
c) In case clause (a) and (b) does not apply, time of supply shall be the date on which the recipient shows the receipt of services in his books of account.
d) In case 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.
 
* “the date on which the supplier receives the payment” shall be earliest of
 
a)  the date on which the payment is entered in his books of account, or
b)  the date on which the payment is credited to his bank account.
 
 
Example-
 
(a) Date of invoice 14th May 2019
(b) Date of receipt of payment 13th July 2019
(c) Date when supplier recorded receipt in books 11th July 2019
 
Time of supply will be 14th May 2019
 
Time of supply in case of supply of services on reverse charge
 
Section 13(3) states that in case of supply of services covered under reverse charge, time of supply is earliest of:
 
a) Date of payment as entered in books or Date of payment in bank account, whichever is earlier
b) Date immediately following 60 days from the date of issue of invoice by the supplier.
c) In case, 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.
d) In case of supply of services by an associated enterprise, 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.
 
Time of supply in case of supply of vouchers
 
Section 13(4) states that in case of supply of vouchers, time of supply shall be 
 
c) Is supply is identifiable at that point -  date of issue of the voucher
d) In  all other cases – date of redemption of the voucher.
 
Time of supply – residuary provisions
 
Section 13(5) states that, where it is not possible to determine the time of supply under the provisions of subsection (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.
 
Time of supply in case of interest, late fee or penalty
 
Section 13(6) states , 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.
 
Sometimes there may be charges imposed by the supplier on account of some deviation or
special circumstance from the expected terms of contract on the part of the recipient. These special charges are listed as interest, late fee or penalty on account of delay in payment of consideration. In these cases, the time of supply is appointed to be the date of receipt by the supplier.

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