TIME AND VALUSE OF SUPPLY UNDER MODEL GST LAW
By: – DR.MARIAPPAN GOVINDARAJAN
Goods and Services Tax – GST
Dated:- 3-11-2016
Time of supply
The time of supply fixes the point when the liability to charge GST arises. Section 12 of the Act deals with the time of supply of goods and Section 13 of the Act deals with the time of supply of services.
Time of supply of goods
Section 12(2) provides that the time of supply of goods shall be the earliest of the following-
(a) (i) the date on which the goods are removed by the supplier for supply to the recipient, in a case where the goods are required to be removed; or
(ii) the date on which the goods are made available to the recipient, in a caswe where the goods are not required to be removed; or
Explanation 1 to this Section provides that the provisions contained in (ii) shall apply in cases where the goods-
* are physically not capable of being moved; or
* are supplied in assembled or installed form; or
* are supp
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ments of accounts of successive payment relates. If there is no such successive statements of account, then the time of supply shall be-
* the date of issue of invoice; or
* the date of receipt of payment
whichever is earlier.
Section 12(4) gives powers to the Central Government or a Statement to specify, by notification, on the recommendation of the Council, the supply of goods that shall be treated as continuous supply of goods.
Time of supply on reverse charge basis
Section 12(5) provides that 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-
* the date of receipt of goods; or
* the date on which the payment is made;
* the date of receipt of invoice; or
* the date of debit in the books of accounts.
The explanation to this section provides that that 'the date on which the payment is made' shall be-
* the date on which the payment is entered in the books of acc
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ue of invoice or the date of receipt of the payment, whichever is earlier, if the invoice is issued within the prescribed period; or
(b) the date of completion of the provision of service or the date of receipt of payment, whichever is earlier, if the invoice is not issued within the prescribed period; 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 above two clauses do not apply.
Explanation 1 to this section provides that the supply shall be deemed to have been made to the extent it is covered by the invoice or payment.
Explanation 2 to this section provides that 'the date of receipt of payment' shall be-
* the date on which the payment is entered in the books of account of the supplier; or
* the date on which the payment is credited to his bank account,
whichever is earlier.
Continuous supply of services
Section 13(3) provides that in case of continued supply of services, the time of supply
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of receipt of services; or
* the date on which the payment is made; or
* the date of receipt of invoice; or
* the date of debit in the books of accounts.
Explanation to this section provides that 'the date on which the payment is made' shall be-
* the date on which the payment is 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.
Cessation of service
Section 13(6) provides that in a case where supply of services ceases under a contract before the completion of supply, such services shall be deemed to have been provided at the time when the supply ceases.
Non possibility to determine the time of supply
Section 13(7) provides that where it is not possible to determine the time of supply of services as mentioned above, the time of supply shall-
* in a case where a periodical return has to be filed, be the date on which such return is to be filed; or
* in any other case, be the date
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the payment is also received after the change in effective rate of tax, the time of supply shall be the date of receipt of payment or the date of issue of invoice, whichever is earlier; or
* where the invoice has been issued prior to change in effective rate of tax but the payment is received after the change in effective rate of tax, the time of supply shall be the date of issue of invoice; or
* where the payment is received before the change in effective rate of tad, but the invoice for the same has been issued after the change in effective rate of tax, the time of supply shall be the date of receipt of payment.
The time of supply, in case that taxable service has been provided after the change in effective rate of tax, shall be determined in the following manner-
* where the payment is received after the change in effective rate of tax but the invoice has been issued prior to the change in effective rate of tax, the time of supply shall be the date of receipt of the payment;
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e value of a supply of goods and/or services shall be the transaction value, that is the price actually paid or payable for the said supply of goods and/or services where the supplier and the recipient of supply are not related and the price is the sole consideration of the supply.
Inclusion in transaction value
Section 15(2) provides that the transaction value shall include-
* any amount that the supplier is liable to pay in relation to such supply but which has been incurred by the recipient of the supply and not included in the price actually paid or payable for the goods and/or services;
* the value, apportioned as appropriate, of such goods and/or services as are supplied directly or indirectly by the recipient of the supply free of charge or at reduced cost for use in connection with the supply of goods and/or services being valued, to the extent that such value has not been included in the price actually paid or payable;
* any taxes, duties, fees and charges levied under
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he transaction value shall not include any discount allowed before or at the time of supply provided such discount is allowed in the course of normal trade practice and has been duly recorded in the invoice issued in respect of the supply.
Determination of valuation that cannot be made
Section 13(4) provides that the value of supply of goods and/or services in the following situations which cannot be valued, shall be determined in such manner as may be prescribed in the rules-
* the consideration, whether paid or payable, is not money, wholly or partly;
* the supplier and the recipient of the supply are related;
* there is reason to doubt the truth or accuracy of the transaction value declared by the supplier;
* business transactions undertaken by a pure agent, money changer, insurer, air travel agent and distributor or selling agent of lottery;
* such other supplies as may be notified by the Central or a State Government in this behalf on the recommendation of the Council.
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