CBEC’s FAQs on Time of Supply under GST

The FAQs related to Time of Supply under the Goods and Services Tax (GST) as per compilation made by the NACEN of CBEC to acquaint stakeholders with the Model GST Law and its nuances, are as under:

Q 1. What is time of supply?

Ans. The time of supply fixes the point when the liability to charge GST arises. It also indicates when a supply is deemed to have been made. The MGL provides separate time of supply for goods and services.

Q 2. When does the liability to charge GST arise in respect of supply of goods?

Ans. Section 12 of the MGL provides for time of supply of goods. The time of supply of goods shall be the earliest of the following namely,

(i) the date on which the goods are removed by the supplier, where the supply of goods require removal; or

(ii) the date on which the goods are made available where the supply does not require removal; or

(iii) the date on which the supplier issues invoices with respect to the supply where the above two situations do not apply; or

(iv) the date on which the recipient shows the receipt of the goods in his books of accounts.

Q 3. What is time of supply of continuous supply of goods?

Ans. The time of supply of continuous supply of goods is;

a) where successive statements of accounts or successive payments are involved, the date of expiry of the period to which such successive statements of accounts or successive payments relate.

b) where there are no successive statements of account or successive payments involved, the date of issue of the invoice or the date of receipt of payment whichever is earlier.

Q 4. What is time of supply of goods sent on approval basis?

Ans. In case of supply on approval basis, the time of supply shall be the time at which it is known whether a supply will take place or six months from the date of supply, whichever is earlier.

Q 5. Where it is not possible to determine the time of supply in terms of sub-section 2, 3, 5 or 6 of Section 12 or that of Section 13 of MGL, how will time of supply be determined?

Ans. There is a residual entry in Section 12(7) as well as 13 (7) which say that if periodical return has to be filed, then the due date of filing of such periodical return shall be the time of supply. In other cases, it will be the date on which the CGST/ SGST/ IGST is paid.

Q 6. When does the liability to pay GST arise in respect of supply of services?

Ans. Unlike goods, in the case of services, the time of supply is determined by the fact whether the invoice for supply of services has been issued within the prescribed period or beyond such prescribed period.

Q 7. What is time of supply of service when invoice is not issued within prescribed period?

Ans. The time of supply of service in such cases shall be the earliest of the following:

(i) date completion of the provision of service; or

(ii) the date of receipt of payment.

Q 8. What is time of supply of service when invoice is issued within prescribed period?

Ans. The time of supply of service in such cases shall be the earliest of the following:

(i) date of issue of invoice; or

(ii) the date of receipt of payment.

Q 9. What does “date of receipt of payment” mean?

Ans. It is the earliest of the date on which the payment is entered in the books of accounts of the supplier or the date on which the payment is credited to his bank account.

Q 10. Suppose, invoice is not issued and date of payment or date of completion of provision of service are also not ascertainable, what will be the time of supply?

Ans. The time of supply shall be the date on which the recipient shows the receipt of services in his books of accounts.

Q 11. Suppose part advance payment is made or invoice issued is for part payment, whether the time of supply will cover the full supply?

Ans. No. The supply shall be deemed to have been made to the extent it is covered by the invoice or the part payment.

Q 12. What is time of supply of service in case of tax payable under reverse charge?

Ans. The time of supply will be the earliest of the following dates:

a) date of receipt of services;

b) date on which payment is made;

c) date of receipt of invoice;

d) date of debit in the books of accounts by supplier.

Q 13. What will be the time of supply in continuous supply of services?

Ans. The time of supply shall be the due date of payment, if ascertainable from the contract. If not ascertainable, it will be earliest of date of receipt of payment or the date of issue of invoice or completion of event where payment is linked to completion of event.

Q 14. Let’s say there was increase in tax rate from 18% to 20% w.e.f. 1.6.2017. What is the tax rate applicable when services provided and invoice issued before change in rate in April 2017, but payment received after change in rate in June 2017?

Ans. The old rate of 18% shall be applicable as services are provided prior to 1.6.2017.

CBEC’s FAQs on GST