Goods and Services Tax – GST – By: – Mr. M. GOVINDARAJAN – 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 supplied by the supplier to his agent or his principal. (b) the date on which the su
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f 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 accounts of the recipient; or the date on which the payment is debited in his bank account, whichever is earlier. Time of supply g
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n 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 shall be- Where the due date of payment is ascertainable from the contract, the date on which the payment is liable to be made by the recipient of service, whether or not any inv
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e 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 on which CGST/SGST is paid. Change in rate of tax in respect of supply of services It is inevitable in case of services, change of tax rate at any time. The Government may vide Finance Act increase the rate of tax. For example, servi
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ive 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; or where the invoice has been issued and the payment is received before the change in effective rate of tax, the time of supply shall be the date of receipt of payment or date of issue of invoice, whichever is earlier; and where the invoice has been issued afte
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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 any statute other than SGST Act or CGSG Act or the IGST Act; incidental expenses, such as, commission and packing, charged by the supplier to the recipient of a supply, including any amount charged for anything done by the supplier in respect of the supply of goods and/or services at th
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