Mundle Venkatraman & Associates

Point of Supply

By: Mr. Harshit Mogra - 5th November, 2020

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Point of Supply a.k.a. Point of Taxation under GST Law

Point of taxation or the time of supply is the time when goods have been supplied and services have been provided or are deemed to be supplied and provided. Determination of tax rate, value of goods and due date for payment of taxes are based upon the point of taxation.

Liability to pay taxes under CGST Act, SGST Act, arises as determined by the time of Supply of Goods and Services. There are different rules for Time of supply of Goods and Time of Supply of Services.

Time of Supply of Goods

Time of supply of Goods is determined as per the provisions of Section 12(1) of the CGST Act, 2017:

Time of Supply occurs prior to the aforementioned two dates that are: -

The date of invoice issued by the supplier or the last date on which supplier is required to issue invoice in respect of supply of goods under sub-section (1) of section 31, or
On the date when payment is received by the supplier in respect of Supply of Goods, i.e. an advance payment.

If the supply involves movement of goods invoice should be issued before or at the time of removal of goods otherwise it should be issued before or at the time of delivery of the goods / making them available to the recipient.

On the recommendation of GST Council, Government has notified the registered individual as the class of persons who shall pay GST Liability at the time of Supply.

Payment of GST liability at the time of receipt of advance payment for the supply of Goods is exempted for all the taxpayers except those registered under Composition Scheme as per Notification No. 66/2017

Time of Supply of Services:-

Time of Supply of Services is earlier of the below mentioned two dates that are:-

If the invoice is issued within the legally prescribed period under section 31(2) of the CGST Act then:- Date when the supplier issues the invoice or the date on which payment is received, whichever is earlier, or
If the invoice is not issued for the supply of services as prescribed under the section 31(2) of the Act then:- date of provision of service or the date on which the payment is received, whichever is earlier, or
In case if the above two rules do not apply, then the date on which the receipt of service is shown in the books of accounts of the recipient.

The last date by which invoice has to be issued in terms of Section 31 is within a period of maximum 30 days from the provision of service. In case of Banking and Financial Services Institutions (BFSIs) such a period extends to 45 days.

Time of supply of goods when tax is to be paid on reverse charge basis:-

Reverse charge is that mechanism under which the tax liability arising on the supply of goods is to be paid by the recipient of the goods. Time of Supply of Goods under RCM is earlier of the following dates:-

Date on which such goods are received, or
The date prior to the date on which the payment of such goods is recorded in the books of accounts of the recipient or date when the payment is debited in his bank account, or
Date immediately following 30 days from the date of issue of invoice or any other legal document in lieu of invoice by the supplier.

If the time of Supply cannot be determined in the above prescribed manner, then time of supply is considered to be the date on which such transaction is recorded in the book of accounts of recipient of Goods.

Time of supply of services when tax is to be paid on reverse charge basis:-

Time of Supply of Services under RCM is earlier of the following dates:-

Date prior to the date on which the payment of such goods is recorded in the books of accounts of the recipient or date when the payment is debited in his bank account, or
Date immediately following 60 days from the date of issue of invoice or any other legal document in lieu of invoice by the supplier

Time of supply in case of supply of vouchers

A Voucher is an instrument whose holder can get a discount or exchange it for goods or services.

Time of Supply of Vouchers is:-

If the supply can identified then the date of issue of Voucher, or
The date on which the voucher is redeemed in all the other cases.

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Point of Supply

Point of Supply

By: Mr. Harshit Mogra - 5th November, 2020

Share on:

Point of Supply a.k.a. Point of Taxation under GST Law

Time of Supply of Goods

Time of Supply of Services:-

Time of supply of goods when tax is to be paid on reverse charge basis:-

Time of supply of services when tax is to be paid on reverse charge basis:-

Time of supply in case of supply of vouchers

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