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Time, Place and Value of Supply

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 liability to pay GST completely relies on 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 interstate or intrastate supply. As interstate supply attracts Integrated Goods and Services Tax (IGST) whereas intrastate 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 the information regarding the place of supply of goods which are imported to or sent out from India.

(ii) Section 11 of the IGST Act contains information regarding the place of supply of the various goods.

(iii) Section 12 of the IGST Act contains the information regarding the place of supply where the area of provider and recipient is within the Indian Territory.

(iv) Section 11 of the IGST Act contains the information regarding the place of supply where the area of either provider or recipient is outside India.

Value of Supply

The last concept 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, as GST is levied on the basis of the value of goods or services. Generally, under GST, to levy the taxes the transactional value of supply is considered as the actual value of the supply. However, here are some of the methods that can be used to determine the value of the supply of goods or/and services:

(i) Comparison Method

(ii) Computed Value Method

(iii) Residual Method