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Past record of government for a change in rate tax become a practice. Therefore the government has given space in law for such type of situation and this practice also continues in GST Law. According to the section 14 of CGST which has provided the change in the rate of tax in respect of the supply of goods or service as under:

Goods and Service supplied before the change in tax rate

  • Where invoice issued and payment received after the change in rate, time of supply shall be considered, date of issued invoice and date of payment received, whichever is earlier.
  • Where invoice issued prior to the change of tax rate and payment received after the change of tax rate, in this situation, date of issued invoice shall be considered time of supply.
  • Where payment received prior the change in tax rate and invoice issued after the change in tax rate, date of payment shall be considered time of supply.


Goods and Service Supplied before Change of Rate

Before Change of Tax Rate

After  Change of Tax Rate

Time of Supply

 

 

Invoice Issued
Payment received

Whichever is earlier from both

Invoice Issued

Payment received

Date of Invoice

Payment Received

Invoice Issued

Payment Received


Goods and Service supplied after the change in tax rate

  • Where invoice issued and payment received before the change in rate, time of supply shall be considered, date of issued invoice and date of payment received, whichever is earlier.
  • Where invoice issued after to change of tax rate and payment received before the change of tax rate, in this situation, date of issued invoice shall be considered time of supply.
  • Where payment received after the change in tax rate and invoice issue prior change in tax rate, date of payment shall be considered time of supply.

Goods and Service Supplied After Change of Rate

Before Change of Tax Rate

After  Change of Tax Rate

Time of Supply

Invoice Issue
Payment received

Whichever is earlier from both

Invoice Issued

Payment received

Date of Payment Received

Payment received

Invoice Issue

Date of Invoice


Provided that the date of receipt of payment shall be the date of credit in the bank account if such credit in the bank account is after four working days from the date of the change in the rate of tax.

Explanation. For the purposes of this section, “the date of receipt of payment” shall be the date on which the payment is entered in the books ofaccount of the supplier or the date on which the payment is credited to his bank account, whichever is earlier.


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Category GST, Other Articles by - Mohan Arya  



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