Time, Place and Value of Supply under GST Explained

Time, Place and Value of Supply under GST Explained

According to the law, the point of taxation means the point in time when goods have been deemed to be supplied or services have been deemed to be provided. The point of taxation enables us to determine the rate of tax, value, and due dates for payment of taxes.

The liability to pay CGST / SGST will arise at the time of supply as determined for goods and services. There are separate provisions for time of supply for goods and time of supply for services. The liability to pay CGST / SGST on the services shall arise at the time of supply as determined by GST provisions.

How to Determine Time of Supply

The time of supply of goods/services shall be the earlier of the following dates:
The date of issuing invoice (or the last day by which invoice should have been issued)
OR
the date of receipt of payment, whichever is earlier
If the supplier of taxable goods/service receives an amount up to INR 1000 in excess of invoice amount, the time of supply for the extra amount shall be the date of issue of invoice (at the option of the supplier).
For both the above clauses, the supply shall be assumed to have been made to the extent it is covered by the invoice or the payment (as the case may be).
For the second clause, the date of receipt of payment shall be the earlier of:
The date on which the dealer enters the payment in their books
OR
The date on which the payment is credited to their bank account
For example, if the date of invoice is 15th May 2018, and date of receipt of payment is 10th July 2018. The date when the supplier recorded the receipt in his books is 11th July 2018. Thus, the time of supply will be 15th May 2018.