How to Ascertain the Time of Supply of Goods under GST?
As soon as a supplier fulfills the supplies of goods, GST applies to the transaction. However, how to determine the date on which the supply is completed?
Does it depend on the actual delivery of the goods or issue of the tax invoice? Let’s understand the provisions related to the time of supply of goods under GST along with relevant examples.
What is the date of receipt of payment?
A supplier is considered to have received payment for the goods on the date which is the earlier of –
- The date on which payment is entered in books of accounts of the supplier, or
- The date on which payment is credited to his bank account.
For example, Rahul received ₹ 10,000 from his customer on 15th June in his bank account. However, he entered the payment in his books on 20th June. In this case, the date of payment will be 15th June.
If the payment had been entered on 10th June, the date of payment would have been 10th June in that case.
How is the time of supply calculated for goods?
Time of supply will be the earliest of:
- Invoice Date, or
- Last date on which the taxpayer is required to issue the invoice.
To know how the GST is charged on Mixed and Composite supply, click here.
What is the last date for issuing an invoice for the supply of goods?
A taxpayer has to issue the invoice for the supply before goods are –
- Removed for supply to the recipient, if the supply involves the movement of goods, or
- Delivered to the recipient in any other case.
Initially, GST was applicable on advance payment also. Later, the Government relieved the taxpayers (except the composition taxpayers) by issuing a notification. Now, the entire GST is payable at the time of supplying the goods.
For example, ABC Ltd supplied goods to Mahima on 12th May 2019. It raised the invoice on 25th May 2019. Since the due date of the invoice should have been 12th May (the goods were supplied that day), the time of supply will be 12th May 2019.
Had the invoice been raised on 30th April, the time of supply would be 30th April in that case.
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What will be the time of supply of goods (in case of reverse charge)?
In case of reverse charge supplies, the time of supply for the recipient will be the earliest of:
- Date of receipt of goods,
- Date immediately following 30 days from the date of issue of invoice or any other legal document instead of the invoice.
If it isn’t possible to calculate the time of supply in the above manner, then the date of entry in books of accounts of the recipient will be considered as the time of supply.
For example, Manisha received goods on 10th June. The invoice was raised on 20th June. The time of supply will be 10th June.
If the invoice was raised on 5th May, 4th May would have been the time of supply (since it falls on the 31st day from the invoice date).
What will be the time of supply for vouchers?
Time of supply will be –
- Date of issue of voucher, if the supply can be identified at that point OR
- Date of redemption of voucher in all other cases.
What if the time of supply can’t be determined?
After applying the above rules, if the time of supply can’t be determined, it will be –
- The date on which GST return has to be filed, or
- The date on which tax has to be paid.
Grasping so many dates and concepts can be cumbersome. Don’t worry – You can find a Chartered Accountant online who can assist you in the calculation of the time of supply and filing of return.
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