TIME OF SUPPLY OF SERVICES
By: – CA Akash Phophalia
Goods and Services Tax – GST
Dated:- 28-12-2016
Introduction
With the immense effort in the present service tax regime, finally the government was able to form the refined principles for determination of point of taxation of services. The government in the GST regime has tried to continue its legacy of Point of Taxation principles for identification of time of supply of services.
Time of Supply of Services
The provisions related to time of supply of services are contained in Section 13 of the revised Model GST Act which reads as under :-
“13. Time of supply of services
(1) The liability to pay CGST/SGST on services shall arise at the time of supply, as determined in terms of the provisions of this section.
(2) The time of supply of services 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 section 28, to issue t
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he following dates, namely-
(a) the date on which the payment is made, or
(b) the date immediately following sixty days from the date of issue of invoice by the supplier:
PROVIDED that where it is not possible to determine the time of supply under clause (a) or (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 '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.
Explanation.- For the purpose of clause (a), “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.
(4) In case of supply of vouchers, by whatever name called, by a supplier, the time of supply shall be-
(
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ollowing dates :-
(a) The date of issue of invoice in case when invoice is issued and in case where the invoice is not issued then the last date on which invoice is required to be issued under section 28 of model GST Act.
(b) Date of receipt of payment by supplier with respect to the supply.
Here, section 28 of the Model GST Act provider for the time of issue of invoice, manner, format and the contents to be mentioned in the invoice issued in relation to supply of services.
Thus as per above provisions of law the time of supply of services is the earliest of the two dates viz date of issue of invoice or the date of receipt of payment whichever is earlier. However, it may happen that the registered taxable person does not issue invoice at all, then in such case instead of taking the date of issue of invoice, the last date when the invoice should be issued in accordance with the law shall be taken.
The law further provides that in case supplier receives advance beyond the amount of
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ll be:-
(a) date of issue of voucher, if supplier is identifiable.
(b) date of redemption of vouchers, if supplier is not identifiable.
Residual Provision
Where it is not possible to determine time of supply of services under any of the above stated provision of law then it shall be calculated as –
(a) in case where periodical return has to be filed, due date of filling return.
(b) in case no periodical return has to be filed, date of payment of CGST/SGST.
Date of Payment
The meaning of 'date of payment' for time of supply of services is explained in the said provisions itself and the same is applicable in the same sense throughout the provision. Date on which payment is made for the purposes of identification of time of supply of servcie is the earlier of the following :-
(a) Book entry in the books of recipient of supply i.e. buyer
(b) Debit in bank account
Conclusion
The government is positive in its effort to implement GST quickly and effectively. At the same time a pos
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