Time of supply in GST
A summary of the time of supply in GST
In this post, we will explain what “Time of Supply” means under GST. This term is important because it tells you when you need to pay GST on goods or services. We will cover the basics of how the Time of Supply is decided for different situations, like selling goods or services, and whether you are paying the tax or someone else is paying. Understanding this will help you know exactly when your GST payment is due.
Let’s look at each section:
What is the time of supply under GST?
The term “Time of supply” in GST refers to the point at which goods or services are considered to have been supplied. It is essential when calculating tax payment due dates.
The supplier must pay CGST, SGST, or IGST at the Time of Supply. Goods and services are classified separately depending on their Time of Supply.
Why is the time of supply important?
- The Time of Supply refers to when goods or services are considered delivered. Knowing this helps the seller decide when to pay taxes.
- The place of Supply decides whether the invoice is subject to IGST or CGST/SGST.
- The value of Supply is important because GST is calculated based on the sale price. If the value is calculated incorrectly, the GST charged will also be incorrect.
Time of Supply of Goods
Time of supply of goods under forward Charge
The Time of Supply for goods under forward Charge is determined by the earliest of these dates:
- The date the supplier issues the invoice or the last date the invoice should have been issued.
- The date the supplier receives payment.
Important Notes:
- GST is not required when receiving advance payments for goods. This relief applies only to goods, not services.
- Since November 15, 2017, GST on goods is payable only when the invoice is issued.
- For payments up to ₹1,000 received above the value of goods, the supplier can choose the invoice date for GST payment.
Time of supply of goods under reverse Charge
The Time of Supply for goods taxable under reverse Charge is the earliest of these dates:
- The date the goods are received.
- The date payment is made.
- The date is 30 days after the invoice is issued.
Note: GST must be paid when advances are received for goods supplied under Reverse Charge.
Time of Supply for Services
Time of supply of services under forward charge
The Time of Supply for services taxable under forward Charge is determined by the earliest of these dates:
- If the invoice is issued within the prescribed time limit:
- Date of the invoice
- Date of receipt of payment
- If the invoice is not issued within the prescribed time limit:
- Date of service provision
- Date of receipt of payment
Note: GST must be paid on any advances received for services to be provided.
Time of supply of services under reverse Charge
The Time of Supply for services taxed under reverse Charge is the earlier of these two dates:
- The date of payment.
- The date is 60 days after the supplier issued the invoice.
Time of supply in case of supply of vouchers
- The Time of Supply of goods or services is the date of issue of the voucher if it is identifiable at the time of issue of the voucher.
- In any other case, the Time of Supply is the date of the voucher’s redemption.
Time of supply of goods and services in Residual cases
The Time of Supply for goods or services is the due date for filing the return if a periodic return is required. In other cases, it is the date when the tax payment is made.
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