Time of supply in case of change in rate of tax - Sec 14

Time of Supply in Case of Change in Rate of Tax - Sec 14

Chapter IV under the CGST Act covers four major sections relating to the Time as well as the Value of supply. The GST laws have provided distinct provisions to determine the time of supply for goods or services. These provisions are as follows:

Sec 12: Time of Supply of Goods 

Sec 13: Time of supply of services 

Sec 14: Change in rate of tax in respect of supply of goods or services. 

Sec 15: Value of Supply 

As we discussed in earlier articles, the normal time of supply rules changes if there is a change in the tax rate. In this case time of supply will be determined as per the provisions of Secc 14. In this article, we are going to dive deep into Sec 14 and understand the details in the given section. 

Supply of Goods or Services before Change in Tax Rate

1. The first case is related to the scenarios where the invoice is issued and the payment is received after the tax rate change. In these cases, the time of supply of goods or services will be determined based on the date of receipt of payment or the date of invoice issue, whichever is earlier. 
2. The second case is related to the scenarios where the invoice is issued before the tax rate change. But payment is received post the change in tax rate. The time of supply for such cases is the date of invoice issuance. 
3. The third case is related to scenarios where the payment is being received before the tax rate change. But the invoice for the same is issued after the tax rate change. The time of supply in such scenarios is the date of receipt of payment. 

To summarise:

Supply of Goods or Services After Change in Tax Rate

1. The first case here is where the payment is received after the tax rate change but the invoice is issued before the tax rate change. The time of supply in such a case shall be the date of payment receipt. 
2. The second case here is where the payment is received and the invoice is issued before the change in tax rate. The time of supply in such scenarios is the date of issuance of invoice or receipt of payment whichever is earlier. 
3. The third case is where the invoice is issued after the tax rate change but the payment is received before the tax rate change. The time of supply in these scenarios shall be the date of invoice issuance. Provided that the date of receipt of payment will be the date of credit in the bank account. 

Normally the receipt of payment date is the date of credit in the bank account of receipt or the date of entry of payment on books whichever is earlier. But here, the date of credit in the bank account will be relevant only if such credit is after four working days from the date of the tax rate change. 

To summarise

GST By Name | Indian GST Calculator | GST Verification Search Tool | GST Status Check | HSN Code Finder