Time of supply of goods

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Significance of time of supply:

The time of supply fixes the point when the liability to charge GST arises. It also indicates when a supply is deemed to have been made. Thus, GST would not be payable before the time of supply fixing the tax liability arises. Conversely, the tax is payable at rate in force at the time of supply of goods and or services. Thus, it is imperative to know the correct point of time when a supply is made. The MGL provides separate time of supply for goods and services.

Time of supply of goods (sec 12)

(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 earlier of the following dates-

(a) The date of issue of invoice by the supplier or the last date on which he is required, under section 28, to issue the invoice with respect to the supply; or

(b) The date on which the supplier receives the payment with respect to the supply:

PROVIDED that where the supplier of taxable goods receives an amount up to one thousand rupees in excess of the amount indicated in the tax invoice, the time of supply to the extent of such excess shall, at the option of the said supplier, be the date of issue of invoice.

  1. 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.
  2. For the purpose of clause (b), “the date on which the supplier receives the payment” shall be the date on which the payment is entered in his books of accounts or the date on which the payment is credited to his bank account, whichever is earlier.

(3) In case of supplies in respect of which tax is paid or liable to be paid on reverse charge basis, the time of supply shall be the earliest of the following dates —

  • the date of the receipt of goods, or
  • the date on which the payment is made, i.e., the date on which the payment is entered in the books of accounts of the recipient or the date on which the payment is debited in his bank account, whichever is earlier, or
  • the date immediately following thirty days from the date of issue of invoice by the supplier:

PROVIDED that where it is not possible to determine the time of supply under clause (a), (b) or (c), the time of supply shall be the date of entry in the books of account of the recipient of supply.

(4) In case of supply of vouchers, by whatever name called, by a supplier, the time of supply shall be-

  • the date of issue of voucher, if the supply is identifiable at that point; or
  • the date of redemption of voucher, in all other cases;

(5) In case it is not possible to determine the time of supply under the provisions of sub-section (2), (3) or (4) the time of supply shall be determined as follows:

  • in a case where a periodical return has to be filed, be the date on which such return is to be filed, or
  • in any other case, be the date on which the CGST/SGST is paid.

Thus, the above rules may be summarized as under:

Case Time to be noted Determination of time of supply
General rule
  • The date of issue of invoice
  • The date on which he is required to issue invoice
  • The date on which payment is entered in his books of account
  • The date on which payment is credited in his bank account
The earliest of the above event
Advance payment up to Rs 1000/ Date of issue of invoice At the option of supplier date of issue of invoice may taken
Liability under reverse charge mechanism
  • The date of the receipt of goods
  • The date on which payment is entered in his books of account
  • The date on which payment is credited in his bank account
  • 30 days after the date of issue of invoice
&The earliest of the above event or date of entry in the books of account
Supply of vouchers
  • The date of issue of voucher
  • The date of redemption of voucher
If supply is identifiable than date of issue of invoice and in any other case date of redemption.
In any other case
  • Date on which return is filed in case return is filled
  • The date of payment of tax
Whichever is applicable

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