Why we need to determine the time of supply

Time of supply is an importance concept in GST. Levy of GST is generated by section 8 of CGST/SGST and section 5 of IGST Act. The time of payment of tax will be determined by the time of supply. Chapter IV containing sections from 12 to 15 covers the provisions for time of supply. The time for supply of Goods is specifically covered by section 12 of the CGST/SGST Law. In this article we will cover the time of supply of goods in various cases.

1. Time of supply of goods in forward charge
2. Reverse charge
3. Time of supply in case of vouchers
4. Time of supply of goods in other cases
5. Common provisions

Time of supply for supply of Goods in forward charge

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

Section 28 provide that in case of supply of goods the invoice shall be issued before or at the time of:

a) where the supply involves movement of goods: Removal of goods for supply to the recipient

b) In any other case the  delivery of goods or making available thereof to the recipient

We can conclude that in case of supply of goods the time of invoice will be either earlier or at the time of delivery of goods.Section 28 further says that central government or state government on the recommendation of GST council can specify the categories of supply where they can give specific time period for issuance of invoice.

Time of supply for Goods in reverse charge

IN case of supply of goods is taxable in reverse charge basis. The time of supply shall be the earliest of the following dates:

(a) the date of the receipt of goods, or (by recipient)
(b) the date on which the payment is made, or (by recipient)
(c) the date immediately following thirty days from the date of issue of invoice by the supplier (invoice by supplier + 30 days)

Time of supply of Goods for Vouchers

In case of supply of vouchers the time of supply shall be

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

Time of supply for Goods when not traceable in any of above manner

When it is not possible to find the time of supply in any of the above manner. Following provisions will apply to determine the time of supply.

(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 which the CGST/SGST is paid.

Common provisions

1. Date of payment: In every case the date of payment shall be the earlier of following:
   • the date on which the payment is entered in the books of accounts of the recipient
   • the date on which the payment is debited in his bank account
2. Extent of supply: 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. Receipt upto Rs. 1000: 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