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Time of supply means that time at which we consider our goods/services to be supplied. Once goods/services are considered supply GST shall be charged on them. Time of supply means date on which our liability arises to pay GST.

Time of supply of Goods

As per section 12 of CGST Act, time of supply of goods shall be earlier of the following: -

  1. Date of issue of invoice by supplier
  2. Last date of issue of invoice by supplier
  3. Date of receipt of payment to supplier

Explanation to point no. 2, last date of invoice required to be issued by supplier shall be as per section 31 of CGST Act where supplier shall issue a tax invoice either on or before the following: -

  1. Removal of goods to recipient
  2. Delivery of goods to recipient

As per Notification no. 66/2017-Central Tax dated 15.11.2017, there is no GST to be paid on Advance received in relation to supply of Goods.

Time of supply of Goods and Services

Reverse Charge Mechanism in case of Goods

Time of supply shall be earliest of the following dates: -

  1. Date of receipt of goods
  2. 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.
  3. Date immediately following 30 days from the date of issue of invoice or any other legal document in lieu of invoice by the supplier

However, if it is not possible to determine the time of supply in aforesaid manner, then the time of supply is the date of entry of the transaction in the books of accounts of the recipient of supply.

Time of supply in case of Services

As per section 13 of CGST Act, time of supply of services is earlier of the following: -

  1. Date of issue of invoice as per section 31(2) of CGST Act
  2. Date of provision of service or date of payment whichever is earlier
  3. Date on which recipient shows receipt of services in his books of account
 

Reverse Charge Mechanism in case of Goods

Time of supply shall be earliest of the following dates: -

  1. 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.
  2. Date immediately following 60 days from the date of issue of invoice or any other legal document in lieu of invoice by the supplier

However, if it is not possible to determine the time of supply in aforesaid manner, then the time of supply is the date of entry of the transaction in the books of accounts of the recipient of supply.

For example, if we have received advance amount of Rs.15000 in the month of July, for the services which is to be provided in the month of September then in that case we have to pay GST on the advance amount Rs.15000 by 20th August even if the services are to be provided in September.

Further, if a supplier of taxable goods or services receives an amount upto Rs. 1000/- in excess of the amount indicated on the tax invoice issued, then the supplier has an option to take the date of issue of invoice in respect of such supply as the time of supply.

 

For example, if a supplier has received an amount of Rs. 1500/- against an invoice of Rs.1100/- on 25.07.19 and the date of invoice of next supply to the said recipient is 14.08.19, then he has an option to treat the time of the excess amount of Rs. 400/- either as 25.07.19 or 14.08.19.

Further, date of receipt of payment to the supplier shall be date on which payment is entered in his books of accounts or date on which payment is credit to his bank account whichever is earlier.

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