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Time of Supply of Services under GST

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

Determining the time of supply of Services

a) In case the invoice is issued in the prescribed period

The date on which the invoice is issued; or

The date on which the payment is received

-Whichever is earlier

b) In case the invoice is not issued in the prescribed period

The date on which the service is rendered; or

The date on which the payment is received

-Whichever is earlier

c) In case if the above two provisions do not apply then, the date on which the recipient of service mentions the receipt of services in his/her books of account.

For the above provisions, the prescribed period is either before the service rendered or within 30 days after the service is rendered. However, this rule does not include insurance or banking companies, or financial institutions.

It shall be noted in case if the supplier of taxable service receives an amount of 1000 INR over the amount of invoice drawn, then, in this case, the time of supply for the extra amount received will be the date of issue of the invoice. However, the time of supply purely depends upon the will of the supplier of such service.

Time of supply under reverse charge

Reverse Charge under GST is a situation where the recipient of the service is required to pay the GST amount in place of the supplier. In the case of reverse charge, the time of supply can be determined by the following way:

a) the date on which the payment is made; or

b) the date Immediately after 60 days from the date on which the invoice is issued by the supplier

-Whichever is earlier

In case if it is not possible to know the time of supply of services using the above method. Then in such a case, the time of supply of service will be the date on which the recipient of such service makes an entry in his or her books of accounts.

Time of supply of service in the case when the supplier of such service is located outside India

In case when the supplier of the services rendered is situated outside India then in such case the time of supply of service will be

a) the date on which the receiver of such service makes an entry for the same in his/her books of accounts; or

b) The date on which the payment is made by the recipient

-Whichever is earlier

Note: In this case, the reverse charge mechanism will be applicable wherein the recipient will be liable to pay the taxable amount.

Time of supply of Services in case of vouchers

In the case of vouchers, the time of supply of service can be determined by 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.

Cases when the time of supply of service cannot be determined

In case if the time of supply of service cannot be ascertained by the above following case then the time of supply of such services shall be:

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

or

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

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.