07 December, 2015

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Time of Supply of Goods & Services under GST Act, 2016

Time of Supply of Goods and Supply of Services under Model Goods & Services (GST) Act, 2016
CA Ankit Gulgulia (Jain) | ankitgulgulia@gmail.com
11.    Time of supply of goods

(1) The liability to pay CGST / SGST on the goods shall arise at the time of supply as determined in terms of the provisions of this section.

(2) The time of supply of goods shall be the earliest of the following dates, namely,

(a) (i) the date on which the goods are removed by the supplier for supply to the buyer, in a case where the goods are required to be removed and

(ii) the date on which the goods are made available to the buyer, in a case where the goods are not required to be removed; or


(b) the date on which the supplier issues the invoice with respect to the supply; or

(c) the date on which the   supplier receives the payment with respect to the supply; or (d) the date on which    the buyer shows the receipt of the goods in his books of account.

Explanation 1: The provisions of sub-clause (ii) of clause (a) shall apply in cases where the goods

(a) are physically not capable of being moved; or (b) are supplied in assembled or installed form; or

(c) are supplied by the supplier to himself or to his agent or his principal.

Explanation 2: For the purposes of sub-clause (ii) of clause (a), the expression ’made available to the buyer’ shall mean when the goods are placed at the disposal of the buyer.

Explanation 3: For the purposes of clauses (b) and (c) of sub-section (2), the supply shall be deemed to have been made to the extent it is covered by the invoice or, as the case may be, the payment.

(3) In case of continuous supply of goods, where successive statements of accounts or successive payments are involved, the time of supply shall be the date of expiry of the period to which such successive statements of accounts or successive payments relate. If there are no successive statements of account, the date of issue of the invoice (or any other document) or the date of receipt of payment, whichever is earlier, shall be the time of supply.

(4) For the purposes of sub section (3) above, the Central or a State Government may specify, by notification, the goods that shall be treated as continuous supply of goods;

(5) If the goods (being sent or taken on approval or sale or return or similar terms) are removed before it is known whether a supply will take place, the time of supply shall be at the time when it becomes knownthat the supply has taken place or twelve months from the date of removal, whichever is earlier.

(6) In case it is not possible to determine the time of supply under the provisions of subsection (2), (3) or (5), the time of supply shall

(a) in a case where a periodical return has to be filed, be the date on which such return is to be filed, or

(b) in any other case,be the date on whichthe CGST/SGST is paid.

12.    Time of supply of services

(1) The liability to pay CGST/SGST on services shall arise at the time of supply, as determined in terms of the provisions of thissection.

(2) The time of supply of services shall be :

(a) the date of issue of invoice or the date of receipt of payment, whichever is earlier, if the invoice is issued within the prescribed period; or

(b) the date of completion of the provision of service or the date ofreceipt of payment, whichever is earlier,   if the invoice is not issued within the prescribed period; or (c) the date on which the recipient shows the receipt of services in his books of account, in a case where the provisions of clause (a) or (b) do not apply.

Explanation: For the purposes of clauses (a) and (b), the supply shall be deemed to have been made to the extent it is covered by the invoice or, as the case may be, the payment.

(3) In case of continuous supply of services, the time of supply shall be (a) where the due date of payment is ascertainable from the contract, the date on which the payment is liable to be made by the service receiver, whether or not any invoice has been issued or any payment has been received by the service provider; (b) where the due date of payment is not ascertainable from the contract, each such time when the service provider receives the payment, or issues an invoice, whichever is earlier;

(c) where the payment is linked to the completion of an event, the time of completion of that event;

(4) For the purposes of sub section (3) above, the Central or a State Government may specify,  by  notification,  the  services  that  shall  be  treated  as  continuous  supply  of services;

(5) In case of supplies in respect of which tax is paid on reverse charge basis, the time of supply shall be the earliest of the following dates, namely

(a) the date of receipt of services, or

(b) the date on which the payment is made, or (c) the date of receipt of invoice, or (d) the date of debit in the books of accounts.

(6) In a case where the supply of services ceases under a contract before the completion of the supply, such services shall be deemed to have been provided at the time when the supply ceases.

(7) Where it is not possible to determine the time of supply of services in the manner specified in sub-sections (2), (3), (5) and (6), the time of supply shall (a)in a case where a periodical return has to be filed, bethe date on which such return is

to be filed; or


(b) in any other case, be the date on which the CGST/SGST is paid.
Source:- Sub Committee II Report on Model GST Act, 2016

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