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Time of Supply of Goods under GST

Point of taxation under GST means the point of time in which goods are deemed to be supplied. In simple words Point of taxation (POT) means the time when the taxpayer is liable to pay CGST and SGST/UTGST to the government. However, Point of Taxation (POT) completely depends upon the time of supply. Under GST, several provisions are related to the time of supply of goods and in this article, we will discuss the same.

Determining the time of supply of goods

The time of supply can be determined in the following ways

(a) The date on which the invoice is issued; or

(b) The date on which the payment is received

-whichever is earlier

Let us understand this with an example:

(a) Date of invoice 1st January 2020

(b) Date of receipt of payment 10th February 2020

In this case, the time of the supply of goods shall be 1st January 2020.

Time of supply of goods under reverse charge

Reverse Charge Mechanism or RCM is a case where the recipient of goods or/and services is required to pay the tax instead of the supplier. In the Reverse Charge Mechanism, the time of supply of the goods can be determined in the following way:

(a) the date on which goods are received; or

(b) the date on which the payment is made; or

(c) Immediately after 30 days from the date on which the invoice is issued by the supplier

-Whichever is earlier

In case if the time of supply of goods cannot be determined using (a), (b) or (c) case scenarios then in such the time of supply of goods shall be the date on which the entry is made by the recipient in the books of account.

Let us understand this with an example:

(a) Date of receipt of goods 1st December 2019

(b) Date of payment 1st January 2020

(c) Date of invoice 1st February 2020

(d) Date of entry in books of accounts of the recipient 10th February 2020.

Time of supply of goods, in this case, will be 1st December 2019

If in case the recipient is not able to determine the time of supply in the above case scenario then, in that case, the time of supply of goods will be 10th February 2020.

Time of supply of goods for vouchers

For vouchers, the time of supply of goods can be determined in the following ways

(a) The date on which the voucher is issued, in case if the supply can be determined; or

(b) The date on which the voucher is redeemed, in all other cases.

-Whichever is earlier

Let us understand this with an example:

(a) Issuing date of voucher is 1st January 2020

(b) Date of on which the voucher is redeemed is 10th February 2020

In this case, the time of the supply of goods for vouchers shall be 1st January 2020.

The case when the time of supply of goods cannot be determined

When the time of supply cannot be determined

In case if the time of supply of goods cannot be determined by the above following case then the time of supply shall be:

(a) The date on which GST Return has to be filed

or

(b) The date on which the GST is paid, in any other case.

-Whichever is earlier

Under the GST regime, the Government wants to make sure that the GST is collected at the earliest point of time that is why the time of supply in all the above cases falls earliest of the dates.