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Time of supply is a relevant measure under the GST law for every transaction entered into by the supplier of goods and services. It means the point in time when goods have been deemed to be supplied or services have been deemed to be provided for determining when the taxpayer is liable to pay taxes. While this article dwells upon the time of supply for goods, there is a separate article for time of supply for services.
The time of supply of goods shall be the earlier of the following dates:
(a) The date of issuing of invoice (or the last day by which invoice should have been issued)
(b) The date of receipt of payment
1. The date on which he entered the payment in his books
2. The date on which the payment is credited to his bank account Example:
(a) Date of invoice 15th May 2021
(b) Date of receipt of payment 10th July 2021
(c) Date when supplier recorded receipt in books 11th July 2021
Time of supply will be 15th May 2021.
Reverse charge means the liability to pay tax is by the recipient of goods/services instead of the supplier. In case of reverse charge, the time of supply shall be the earliest of the following dates—
(a) the date of receipt of goods
(b) the date of payment
(c) the date immediately after THIRTY days from the date of issue of invoice by the supplier (60 days for services).
If it is not possible to determine the time of supply under (a), (b) or (c), the time of supply shall be the date of entry in the books of account of the recipient.
(a) Date of receipt of goods 15th May 2021
(b) Date of payment 15th July 2021
(c) Date of invoice 1st June 2021
(d) Date of entry in books of receiver 18th May 2021
Time of supply of goods 15th May 2021
In case of supply of vouchers the time of supply is-
(a) The date of issue of the voucher, if the supply can be identified at that point.
(b) The date of redemption of the voucher, in all other cases.
If it is not possible to determine the time of supply by the above provisions, then it will be-
(a) The date on which a periodical return has to be filed
(b) The date on which the CGST/SGST is paid, in any other case.
In the GST regime, the tax collection event will be the earliest of the dates as given above. The various events like issuing invoice/making payment in case of supply of goods /services or completion of event-in case of supply of service triggering the tax levy, confirms that the Government wants to ensure tax is collected at the earliest point of time.
There are multiple parameters in determining ‘time’ of supply. Thus, businesses continue to face a challenge in maintaining and reconciling between revenue as per financials and as per GST.