Time of Supply of Goods and Services

Nov 20, 2016
2 min read

In GST model Law separate provisions have been prescribed to determine the time of supply of goods and services. Liability for GST (Goods and Services Tax) will arise only at time earliest of occurrence of events of supply, which will be determined as under-

Time of Supply of Goods:

1. Normal Supply: Under normal supply, time of supply will be earliest of the following-

Date issue of invoice
Date of receipt of payment.
Date of Removal of Goods.
Date on which receiver of goods record receipt of goods in books of accounts.
Date on which goods are made available to the recipient.

Above provisions are explained through below given example-

S. Date of Date of Date of Receipt Date of Entry in Books Time of Supply

No. Removal Invoice of Payment of Accounts

1 22.05.2016 26.05.2016 21.05.2016 30.06.2016 21.05.2016

2 25.06.2016 05.07.2016 27.06.2016 28.06.2016 25.06.2016

3 30.07.2016 24.06.2016 23.06.2016 06.07.2016 23.06.2016

4 21.07.2016 25.07.2016 30.07.2016 20.07.2016 20.07.2016

2. Continuous Supply of Goods: Earliest of the following will be time of supply:

a. Where successive statement of accounts or successive payment of accounts are involved-
Date of expiry of successive payment or statement.
b. No successive payment of accounts: Earliest of following-
Date of issue of invoice.
Date of receipt of payment.

3. Under Reverse Charge: Earliest of the following will be time of supply:

Date of receipt of supply.
Date of payment.
Date of receipt of invoice.
Date of debit in books of accounts.

4. Goods sent on approval basis: Earliest of the following will be time of supply:

Time of supply when it is known that supply has taken place.
Six months from the date of approval.

Time of Supply of Services

Time of Supply shall be

1. Invoices issued within prescribed time: Earliest of following-

Date of issue of invoice.
Receipt of payment.

2. Invoice not issued within prescribed time: Earliest of following-

Date of completion of provision of service.
Date of Receipt of payment.

3. Case other than above two situations:

Date on which recipient show receipt of services in books of accounts.

In Case of Continuous Supply of Services Time of Supply shall be

1. Where due date of payment is ascertainable from the contract: Earliest of the following-

Payment has been received by the supplier of service.
Date on which recipient is liable to make payment, whether invoice has been issued or not.

2. Where due date of payment is not ascertainable from contract: Earliest of the following-

Date of issue of invoice.
Date of Receipt of payment.

3. In case payment is related to completion of event, then time of completion of event.

In case of reverse charge time of supply shall be-

Date of receipt of services.
Date of payment.
Date of invoice.
Date of entry in books of accounts.

Thus above are the provisions discussed related to time value of supply of goods and services which will help us in determining the taxable event in case of supply of goods and services.