GST Time of Supply – Queries Asked by Clients to Chartered Accountant

By Raju Choudhary 1

GST Time of Supply – Queries Asked by Clients to Chartered Accountant. Supply has been understood to hold the key to the incidence of GST, but it is the ‘time of supply’ that dictates the occasion when this incidence will come to rest. Taxable supply has been defined to mean a supply of goods and/or services which is chargeable to tax under this Act. It is interesting to note the use of the expression ‘chargeable to tax’ as opposed to ‘leviable to tax’. It has been held that ‘chargeable to tax’ encompasses not only the incidence of tax but also its assessment.

GST Time of Supply

GST Time of Supply – Queries Asked by Clients to CA

Mr AHello sir, Good day to you. How are you?
CAI am doing fine Mr. A, how about you?
Mr AI am doing fine sir. Infact really getting updated on GST now. So today can you please tell me the meaning of Supply under GST?
CAHi Mr. A, Under GST the tax will be levied on the point of supply rather than at the point of sale. Hence, meaning and time of Supply is very important aspect under GST. The meaning of “Supply” is very wide in GST and it covers all forms of supply of goods or services or both via sale, transfer, barter, exchange, license, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business. Infact there are certain specific transaction without consideration also considered to be supply.
Mr AOh, so what if I am making a supply from my godown to shop?
CAIf that transfer is Intra-state then it is not taxable and if the transaction is Inter state then GST will be levied even though this will not involve any payment of consideration.
Mr AAs you provided that GST will be levied on supply of goods or services, so at what time the supply is being considered to be done?
CAMr A, the mechanism to ascertain time of supply for goods under GST is:

  • i) The date of issue of invoice or,
  • ii) The date of receipt of payment

whichever is earlier

And Time of supply of services will be:

If invoice is issued within due dateEarlier of:

  • i) Date of invoice or
  • ii) Date of Receipt of payment
If invoice is not issued within due dateEarlier of:

i) Date of provision of service or ii) Date of Receipt of payment

If invoice need not be issuedDate entered in recipient’s books

Here, the date of receipt of payment is the earliest of the date on which the payment is entered in the books of accounts of the supplier or the date on which the payment is credited to his bank account.

Further, If an amount upto Rs.1000/- is received in excess of amount in Tax invoice then Time of Supply need not be Date of Receipt. Supplier can even opt Date of Invoice as “Time of Supply”.

Mr AOk, suppose if I have received the part amount in advance then?
CAIn this case the supply will be considered for that part advance amount only for which the payment is received. GST needs to be paid even if you receive the advance amount and did not provided or supplied goods or services yet.
Mr AOk, is there is any provision which provides about the exception situation where the time of supply cannot be calculated as above?
CA Yes Mr. A. In case time of supply cannot be determined by above methods then time of supply is considered as :

i) Where periodical return needs to be filed, the date of such return, or

ii) in any other case, the date on which tax is paid

Mr A Ok, is there any special concept also related to supply which I need to know?
CA Yes Mr. A. There are two terms used for supply as follows:

Composite supply: It means a supply of two or more products or services bundled together out of which one is Principle product or supply. For example: Packaging items, handling items with goods.

Here, the supply will be considered of principle produce and the tax will be applied accordingly.

Mixed Supply: It means a supply of two or more products or services bundled together with each other in conjunction with each other. For example: Chocolates are packed with canned foods, cold drinks etc.

Here, the supply will be considered of the item which attracts highest rate of tax and the tax will be levied accordingly.

Mr AOk, is there anything which specifically not considered as supply?
CAYes Mr. A. Below activities are neither treated as supply of goods nor supply of services:

  • i) Service by an employee to employer in relation to his/her employment
  • ii) Services by any Court or Tribunal
  • iii) Functions performed by MP,MLA or corporator
  • iv) Services of crematorium, mortuary or burial
  • v) Sale of Land
Mr AOk, Thank you much for clearing the doubts related to time of supply

Author Details

MJL & Co, Jaipur (Chartered Accountants)
Email – MJLco.jaipur@gmail.com (ph – 0141-4915113)

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