One of the significant changes under the GST regime after subsuming all the indirect taxes is the presentation of the concept of supply under GST. In the old indirect tax regime, taxes were charged on various points and occasions; for instance, on account of goods, taxes were charged at the time of production, transport, supplying, and so forth. However, in the case of services, taxes were charged at the time when the services were rendered or provided.
In the current scenario, after the implementation of the GST, tax is said to be levied at the time of supply of goods or services or both.
So, to understand the concept of supply it is important for us to know the time, place and value of supply under GST.
Time of Supply
The idea of the time of Supply is mentioned under section 10 (Chapter IV) of Central Goods and Service Tax (CGST) Act, 2O17. This Section plainly expresses that the liability to pay GST completely relies upon the time of supply of goods and services. In other words, the taxpayer needs to pay GST when goods are deemed to be supplied or services are deemed to be rendered.
The provisions relating to the supply of goods is different than that of services. Further, the determination of the value of supply helps in understanding the concept of supply under GST more clearly.
Place of Supply
Another significant concept under Goods and Services Tax is the place of supply. Place of supply under GST plays a vital role as it helps in determining whether the supply carried out is an inter-State or an intra-State supply. This is because inter-State supply attracts Integrated Goods and Services Tax (IGST) whereas intra-State supply attracts Central Goods and Services Tax (CGST) and State Goods and Services Tax (SGST). Chapter V of the IGST Act, 2017 clearly defines the concept of the place of supply under GST.
(i) Section 10 of the IGST Act contains information regarding the place of supply of goods other than imports or exports.
(ii) Section 11 of the IGST Act contains information regarding the place of supply of goods imported into or exported from India.
(iii) Section 12 of the IGST Act contains information regarding the place of supply of services where the location of the supplier and the location of the recipient is in India.
(iv) Section 13 of the IGST Act contains the information regarding the place of supply of service where the location of either the supplier or the recipient is outside India.
Value of Supply
The last concept in relation to supply under GST is the value of supply. This concept helps in identifying the value supply of goods or services or both. The concept of value of supply is covered under Section 15 of the Central Goods and Services Tax (CGST) Act, 2017. Valuation has a significant influence since GST is levied on the basis of the value of goods or services. Generally, under GST, the transactional value of the supply is considered as the actual value of the supply for the levy of GST. However, here are some of the methods that can be used in the prescribed situations to determine the value of the supply of goods and/0r services:
(i) Comparison Method
(ii) Computed Value Method
(iii) Residual Method