March 18, 2023
Riddhi Thakrar

The Time of Supply of Services under GST Explained here

The term "point of taxation" refers to the moment when goods or services are considered to have been given. The point of taxation gives us the ability to calculate the tax rate, value, and payment deadlines. CGST and SGST obligations will become due at the time of supply for both goods and services.

Both the time of supply for products and the time of delivery for services are covered by distinct laws. Please go here to read more regarding time supply of goods. According to GST laws, the obligation to pay CGST or SGST on the services shall arise at the moment of supply.

The Process to be followed:

The earlier of the following dates shall constitute the period of service provision:

1. If the invoice is issued within the allotted amount of time, whichever comes first: the date of issuance of the invoice OR the date of receipt of payment.

2. If the invoice is not issued in the allotted amount of time, the earliest of the date of service delivery OR the date of payment receipt

3. If clauses (1) or (2) do not apply, the date on which the recipient records receiving services in his accounting records *before the provision of services or within 30 days of the provision of services, in accordance with invoicing regulations (other than insurance or banking companies, or financial institutions).

The period of supply for any sum up to Rs. 1000 over the invoice amount received by the provider of a taxable service shall be the date the invoice was issued (at the option of the supplier). For sentences (1) and (1): I To the extent that the supply is covered by the invoice or the payment, it must be deemed to have been made (as the case may be). (ii) The payment must be received no later than the earlier of the following dates: the day the payment was recorded in his books OR the day it was deposited to his bank account. For Instance:

Invoice was issued on May 15, 2018

Date of payment receipt: July 10, 2018

When the supplier entered the receipt in the books July 11, 2018

The deadline for supply is May 15, 2018

Reverse Charge Mechanism

A reverse charge occurs when the beneficiary of the products or services is responsible for paying the tax rather than the supplier. The earliest of the following dates shall be the time of supply in the event of reverse charge: Immediately following SIXTY (60) days from the date the supplier sent the invoice (a) OR (b) THE DATE OF PAYMENT (30 days for goods) The date of entry in the receiver of service's accounting books shall serve as the time of delivery if the time of supply under clauses (a), (b), or (c) cannot be ascertained.

The date of payment must be sooner of the following for clause (a): The date the recipient recorded the payment into his accounting records OR 2. The date the money was taken out of his bank account.

Time of Supply in case of Vouchers

When vouchers are supplied, the time of supply is either (a) the date of issue, if the supply can be determined at that time, OR (b) the date of redemption, in all other circumstances.

When it’s difficult to determine the Time of Supply for Services

If the aforementioned provisions cannot be used to establish the time of supply, then it will be either: 1. the date on which a periodic return must be filed, or 2. the date on which the CGST/SGST is paid, in any other circumstance. The tax collection event under the GST regime will occur on the earliest of the dates listed above.

The government's desire to guarantee that tax is collected as soon as possible is confirmed by the numerous events, such as issuing an invoice and making payment in cases of the supply of goods or services or finishing an event and triggering the tax levy in cases of the delivery of services. For those who are already paying VAT and Central Excise, this will be a whole new idea. The "time" of supply is determined by a number of factors. As a result, firms will find it difficult to track and reconcile income reported in both financial statements and GST.


Deposition of tax under inspection

GST of security lending services

Reverse charge mechanism