Time of Supply of Services – Residual provision - GST Ready Reckoner - GST

Time of Supply of Services Residual provision Section 13 of CGST Act 2017 provides for the determination of the time of supply in the situation of Residual provisions. Before starting the analysis of about time of supply of goods, we should read time limit of issue of invoice as per section 31 of CGST Act 2017 . Time limit for issuance of invoice for supply of services under section 31 of CGST Act 2017 The criteria to determine the time of supply of services depend upon whether the invoice is issued within the time prescribed under section 31 of CGST Act 2017. The tax invoice needs to be issued either before the provision of service or within 30 days (45 days in case of insurance companies/ banking companies/ financial institutions including NBFCs) from the date of supply of service. [section 31(2) read with rule 47 of CGST Rules ]. In case of insurance companies/ banking companies/ financial institutions including NBFCs/ telecom companies/ notified supplier of services making taxable supplies between distinct persons as specified in section 25, invoice may be issued before or at the time of recording such supply in the books of account or before the expiry of the quarter during which the supply was made [ Second proviso to rule 47 ]. In case of continuous supply of services , the invoice should be issued either (i) on/ before the due date of payment or (ii) before/ at the time when the supplier of service receives the payment, if the due date of payment is not known (iii) on/ before the date of completion of the milestone event when the payment is linked to completion of an event [Section 31(5)]. Continuous supply of services are provided, or agreed to be provided, continuously or on recurrent basis, under a contract, for a period exceeding 3 months with periodic payment obligations and includes supply of such services as the Government may notify. In case of cessation of supply of services before completion of supply, the invoice (to the extent of the supply made before such cessation) should be issued at the time when the supply ceases [Section 31(6)]. Time of supply of goods or services (Residual provisions), Section 13(5) of CGST Act Where it is not possible to determine the time of supply under the provisions of sub-section (2) or sub-section (3) or sub-section (4) of section 13 of CGST Act 2017, then the time of supply shall be :- E arliest of following dates In a case where a periodical return has to be filed, be the date on which such return is to be filed; or In any other case, be the date on which the tax is paid. Examples Example 1:- A supplier of services has received an amount of Rs.1,00,000/- against an invoice of Rs. 80,000/- on 01.04.2020. the supplier makes a supply against Rs. 20,000/- subsequently but no invoice was issued and no invoice records of adjustment of the said amount appear in books of the supplier. Here, the receipt of excess payment is actually an advance which does not create time of supply in case of supply of services. Since the supplier is registered the time of supply in this case shall be determined as per 13(5)(a) , date on which such return is to be filed against such supply. Example 2:- Enforcement Directorate (ED) in a money laundering case unearthed a large volume of undisclosed goods. The company claimed the assets as income from supply of services. After having received inputs from ED, GST department initiated and investigation to determined GST liabilities. The company agreed to pay GST during investigation. In This case, the date of invoice or the date of supply of goods or the date of receipt of payment are not known and company is also unregistered. In case the Time of supply shall be determined as per sec. 13(5)(b) i.e., date of payment of tax.