Time of Supply of Goods

[CA Akash Phophalia]

The provisions related to time of supply of goods are contained in Section 12 of Model GST Act as under :-

”12. Time of supply of goods

(1) The liability to pay CGST / SGST on the goods shall arise at the time of supply as determined in terms of the provisions of this section.

(2) The time of supply of goods 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 the invoice with respect to the supply; or

(b) the date on which the supplier receives the payment with respect to the supply:

PROVIDED that where the supplier of taxable goods receives an amount up to one thousand rupees in excess of the amount indicated in the tax invoice, the time of supply to the extent of such excess shall, at the option of the said supplier, be the date of issue of invoice.

Explanation 1.- For the purposes of clauses (a) and (b), the supply shall be deemed to have been made to the extent it is covered by the invoice or, as the case may be, the payment.

Explanation 2.- For the purpose of clause (b), “the date on which the supplier receives the payment” shall be the date on which the payment is entered in his books of accounts or the date on which the payment is credited to his bank account, whichever is earlier.

(3) 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 dates, namely-

(a) the date of the receipt of goods, or

(b) the date on which the payment is made, or

(c) the date immediately following thirty 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), (b) or (c), the time of supply shall be the date of entry in the books of account of the recipient of supply.

Explanation.- For the purpose of clause (b), “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-

(a) the date of issue of voucher, if the supply is identifiable at that point; or

(b) the date of redemption of voucher, in all other cases;

(5) In case it is not possible to determine the time of supply under the provisions of sub-section (2), (3) or (4) the time of supply shall

(a) in a case where a periodical return has to be filed, be the date on which such return is to be filed, or

(b) in any other case, be the date on which the CGST/SGST is paid.”

Analysis of the Provisions

The general provision related to determination of time of supply of goods is earlier of the following :-

(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 goods.

Thus as per above provisions of law the time of supply of goods 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.

Extent of amount covered under time of supply

In accordance with the above provisions of law the time of supply with respect to the invoice and payment shall be in respect to the amount which is covered with the said invoice and payment.

For instance, a registered taxable person makes a supply of goods and raises invoice timely of Rs one lacs on say 1^st April 2016 and the payment of ₹ 100500/- is received on say 10^th May 2016, then the time of supply for Rs one lacs shall be the 1^st April 2016.

The provision stated above further provides that in case supplier receives advance upto an amount of 1000 rupees then time of supply in respect to the said advance can be taken as, at the option of the assessee, date of issuance of invoice.

In our earlier example for the surplus amount of ₹ 500/- the time of supply can be taken as the date of issue of invoice in respect to such amount or the date of payment of the said amount, but at the option of the assessee.

Time of Supply – Reverse Charge

In case where tax is liable to paid on reverse charge basis, then time of supply will be earlier of the following :-

(a) The date of receipt of goods

(b) The date on which payment is made

(c) The date which occurs after expiry of 30 days from date of issuance of invoice (DOI) by supplier, in simple words DOI + 30 days.

But if the time of supply is not determinable under any of the above clauses, then time of supply shall be book entry in the books of recipient of supply in simple words buyer of goods.

Time of supply in case of vouchers:-

In case of supply of vouchers, the time of supply shall be the date of issuance of voucher if the supply is identifiable at that point. However, for other situations where supply is not identifiable the time of supply shall be the date of redemption of voucher.

Residual Provision

Where it is not possible to determine time of supply under any of the above stated provisions of law then the time of supply shall be the due date of filing of return if periodical return is to be filed and in other cases the time of supply shall be the date of payment of CGST/SGST.

Date of Payment

The meaning of ‘date of payment’ for time of supply of goods 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 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 modifications introduced in the recently places revised Model GST law specifies the intent of the government to ensure easy and effective acceptance of GST in India. It has considered the submissions and representations placed before it and also took positive steps over the same to overcome the deficiencies existing in the earlier placed Model GST law.

CA Akash Phophalia

9799569294

ca.akashphophalia@gmail.com