Under GST, the existing system of levy of tax on manufacture, provision of taxable services, and sale of goods will be replaced by the concept of ‘SUPPLY’. Therefore, the taxable event under GST is the ‘Supply’ of Goods or Services.
Further under ‘Supply’ there are three important concepts:
- Place of supply of Goods/Services
- Time of Supply of Goods/Services
- Value of Supply of Goods/Service
These three define the incidence of taxability, i.e whether tax will be levied or not, tax type to be levied i.e SGST, CGST & IGST, value of taxable supply of goods/services etc.
It is very important to understand the term ‘place of supply’ for determining the right charge of tax on ‘supply’. The model GST Law lays down the criteria to determine the place of supply. Based on these criteria, you can treat the supply of goods or services as either Intra-State (within the State) or Inter-State (Outside the State).
Time of Supply
Time of supply means the point in time when goods/services are deemed to be supplied/rendered. It enables us to determine the rate of tax, value, and due dates for payment of taxes.
The liability to pay CGST / SGST will arise at the time of supply as determined for goods and services. There are separate provisions for time of supply for goods and time of supply for services.
Follow the below links to understand all aspects of ‘Time of Supply’ (including special cases)
Value of Supply
Valuation primarily revolves around determination of value of supply of goods and/or services on which tax is to be levied. In general, the transaction value is taken as value of supply.