Time of Supply – change in Rate of Tax
By: – CA Akash Phophalia
Goods and Services Tax – GST
Dated:- 29-12-2016
Introduction
The provisions relatd to identification of time of supply of goods and services takes into consideration three things or situations :-
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Completion of provision of supply of goods or services
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Issue of invoice
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Payment of value of Invoice
The legal provisions related to determination of time of supply of goods or services when there is change in rat of tax is stated in Section 14 of the revised Model GST Act which reads as under :-
14. Change in rate of tax in respect of supply of goods or services
Notwithstanding anything contained in section 12 or section 13, the time of supply, in cases where there is a change in the rate of tax in respect of goods or services, shall be determined in the following manner, namely:-
(a) in case the goods or services have been supplied before the change in rate of tax –
(i) where the invoice
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, the time of supply shall be the date of receipt of payment or date of issue of invoice, whichever is earlier; or
(iii) where the invoice has been issued after the change in rate of tax but the payment is received before the change in rate of tax, the time of supply shall be the date of issue of invoice:
PROVIDED that the date of receipt of payment shall be the date of credit in the bank account when such credit in the bank account is after four working days from the date of change in the rate of tax.
Explanation.- For the purpose of this section, “the date of receipt of payment” shall be the date on which the payment is entered in the books of accounts of the supplier or the date on which the payment is credited to his bank account, whichever is earlier:
Anaysis of the Provision
This section contains a peculiar situation when there is change in rate of tax. This section is gooing to play on the situiations when the certain supply is in process due either due to completion of sup
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tive application of this provision:-
(1) The date of receipt of payment shall be the date on which the payment is entered in the books of accounts of the supplier or the date on which the payment is credited to his bank account, whichever is earlier.
(2) The date of receipt of payment shall be the date of credit in the bank account when such credit in the bank account is after four working days from the date of change in the rate of tax.
Conclusion
The proposed provisions in respect to change in rate of tax are well tested and workable provsions that had taken a period of almost four years to settle down. The governmnet in its irge to ensure smoother implementation of GST in India has followed the said provisions in verbatim in the proposed GST regime. However, a point to ponder is that the said provision was earlier for provision of services only and not it is extended to provsion of goods. Only the time will tell how it is going to affect the supply of goods when there is change
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