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Page 1
CHAPTER
6
LEARNING OUTCOMES
a
a
CHAPTER
6
TIME OF SUPPLY
The section numbers referred to in the Chapter pertain to the CGST Act, 2017, unless
otherwise specified. Examples/illustrations/Questions and Answers given in the
Chapter are based on the position of GST law existing as on 30.04.2023.
After studying this Chapter, you will be able to identify the
point in time when the liability to pay GST arises -
? on supply of goods or services where GST is payable under
forward charge
? on supply of goods or services where GST is payable under
reverse charge
? on supply of vouchers exchangeable for goods and services
? on supply of goods and services in residual cases
? in case of enhancement of value of supply on account of
interest, late fee/penalty paid for delay in payment of
consideration
? apply the concepts relating to time of supply of goods and/or
services in problem solving
© The Institute of Chartered Accountants of India
Page 2
CHAPTER
6
LEARNING OUTCOMES
a
a
CHAPTER
6
TIME OF SUPPLY
The section numbers referred to in the Chapter pertain to the CGST Act, 2017, unless
otherwise specified. Examples/illustrations/Questions and Answers given in the
Chapter are based on the position of GST law existing as on 30.04.2023.
After studying this Chapter, you will be able to identify the
point in time when the liability to pay GST arises -
? on supply of goods or services where GST is payable under
forward charge
? on supply of goods or services where GST is payable under
reverse charge
? on supply of vouchers exchangeable for goods and services
? on supply of goods and services in residual cases
? in case of enhancement of value of supply on account of
interest, late fee/penalty paid for delay in payment of
consideration
? apply the concepts relating to time of supply of goods and/or
services in problem solving
© The Institute of Chartered Accountants of India
a
6.2
GOODS AND SERVICES TAX
1. INTRODUCTION
GST is payable on supply of goods or services. A
supply consists of elements that can be separated in
time, like purchase order / agreement, dispatch (of
goods), delivery (of goods) or provision or
performance of service, entry in the records,
payment, and entry of the payment in the records or
deposit in the bank.
So, the question that arises is - at what point of time
in the aforesaid transaction, the GST becomes payable? Does it become payable when
an agreement to supply goods or services is made, or when the goods are shipped or
the services are provided, or when the invoice is issued or when payment is made?
Time of Supply
Time of supply of goods
Time of supply under forward
charge
Time of supply under reverse
charge
Time of supply of vouchers
exchangeable for goods
Time of supply in residual cases
Time of supply of services
Time of supply under forward
charge
Time of supply under reverse
charge
Time of supply of vouchers
exchangeable for services
Time of supply in residual cases
CHAPTER OVERVIEW
© The Institute of Chartered Accountants of India
Page 3
CHAPTER
6
LEARNING OUTCOMES
a
a
CHAPTER
6
TIME OF SUPPLY
The section numbers referred to in the Chapter pertain to the CGST Act, 2017, unless
otherwise specified. Examples/illustrations/Questions and Answers given in the
Chapter are based on the position of GST law existing as on 30.04.2023.
After studying this Chapter, you will be able to identify the
point in time when the liability to pay GST arises -
? on supply of goods or services where GST is payable under
forward charge
? on supply of goods or services where GST is payable under
reverse charge
? on supply of vouchers exchangeable for goods and services
? on supply of goods and services in residual cases
? in case of enhancement of value of supply on account of
interest, late fee/penalty paid for delay in payment of
consideration
? apply the concepts relating to time of supply of goods and/or
services in problem solving
© The Institute of Chartered Accountants of India
a
6.2
GOODS AND SERVICES TAX
1. INTRODUCTION
GST is payable on supply of goods or services. A
supply consists of elements that can be separated in
time, like purchase order / agreement, dispatch (of
goods), delivery (of goods) or provision or
performance of service, entry in the records,
payment, and entry of the payment in the records or
deposit in the bank.
So, the question that arises is - at what point of time
in the aforesaid transaction, the GST becomes payable? Does it become payable when
an agreement to supply goods or services is made, or when the goods are shipped or
the services are provided, or when the invoice is issued or when payment is made?
Time of Supply
Time of supply of goods
Time of supply under forward
charge
Time of supply under reverse
charge
Time of supply of vouchers
exchangeable for goods
Time of supply in residual cases
Time of supply of services
Time of supply under forward
charge
Time of supply under reverse
charge
Time of supply of vouchers
exchangeable for services
Time of supply in residual cases
CHAPTER OVERVIEW
© The Institute of Chartered Accountants of India
6.3
TIME OF SUPPLY
a a
6 3
6.3
What if the goods are shipped over a period of time? What if the service is provided
over a period of time? Provisions relating to ‘time of supply’ provide answers to all
such and other questions that arise with respect to the time when the liability to pay
CGST and SGST/UTGST (intra-State supply) or IGST (inter-State supply) arises. In other
words, time of supply indicates the point in time when the liability to pay tax arises. It
is important to note here that though the liability to pay tax arises at the time of supply,
the same can be paid to the Government by the due dates prescribed with reference
to the said ‘time of supply’. For instance, if time of supply of a given supply is 25
th
May, the tax leviable thereon would be payable latest by 20
th
June, which is the due
date prescribed in the CGST Act for suppliers filing GST return on monthly basis.
1
The CGST Act provides separate provisions for time of supply for goods and services
vide sections 12 and 13 respectively. Section 14 provides for the method of
determining the time of supply in case there is a change in the rate of tax on supply of
goods or services.
2
Sections 12 and 13 employ the provisions of section 31 relating to
issue of tax invoice as a reference point. Therefore, it will be useful to read this Chapter
in conjunction with the provisions relating to tax invoice discussed in detail in Chapter
10: Tax Invoice, Credit and Debit Notes in Module 2 of this Study Material.
Events like issue of invoices, receipt of payment, provision of service, receipt of services
as recorded in books of account need to be analysed to determine the time of supply
when the tax on supply is payable under forward charge. When the tax on supply is
payable under reverse charge, events like date of receipt of goods or services, date of
making payment, date of issue of invoice etc. need to be analysed to determine the
time of supply. The provisions relating to time of supply essentially fix the tax
collection event to the earliest possible time.
In the subsequent pages of this Chapter, sections 12 and 13 are extracted, followed by
their analysis, to understand how to determine the time of supply of goods and
services respectively. When studying the statutory provisions, the definitions
(extracted first) must also be referred to simultaneously, so as to understand the
precise meaning of the terms used.
1
Provisions relating to due date for payment of tax have been discussed in Chapter 13: Payment
of Tax in Module 2 of this Study Material.
2
Provisions of section 14 relating to determination of time of supply in case of change in rate of
tax in respect of supply of goods or services will be discussed at the Final level.
© The Institute of Chartered Accountants of India
Page 4
CHAPTER
6
LEARNING OUTCOMES
a
a
CHAPTER
6
TIME OF SUPPLY
The section numbers referred to in the Chapter pertain to the CGST Act, 2017, unless
otherwise specified. Examples/illustrations/Questions and Answers given in the
Chapter are based on the position of GST law existing as on 30.04.2023.
After studying this Chapter, you will be able to identify the
point in time when the liability to pay GST arises -
? on supply of goods or services where GST is payable under
forward charge
? on supply of goods or services where GST is payable under
reverse charge
? on supply of vouchers exchangeable for goods and services
? on supply of goods and services in residual cases
? in case of enhancement of value of supply on account of
interest, late fee/penalty paid for delay in payment of
consideration
? apply the concepts relating to time of supply of goods and/or
services in problem solving
© The Institute of Chartered Accountants of India
a
6.2
GOODS AND SERVICES TAX
1. INTRODUCTION
GST is payable on supply of goods or services. A
supply consists of elements that can be separated in
time, like purchase order / agreement, dispatch (of
goods), delivery (of goods) or provision or
performance of service, entry in the records,
payment, and entry of the payment in the records or
deposit in the bank.
So, the question that arises is - at what point of time
in the aforesaid transaction, the GST becomes payable? Does it become payable when
an agreement to supply goods or services is made, or when the goods are shipped or
the services are provided, or when the invoice is issued or when payment is made?
Time of Supply
Time of supply of goods
Time of supply under forward
charge
Time of supply under reverse
charge
Time of supply of vouchers
exchangeable for goods
Time of supply in residual cases
Time of supply of services
Time of supply under forward
charge
Time of supply under reverse
charge
Time of supply of vouchers
exchangeable for services
Time of supply in residual cases
CHAPTER OVERVIEW
© The Institute of Chartered Accountants of India
6.3
TIME OF SUPPLY
a a
6 3
6.3
What if the goods are shipped over a period of time? What if the service is provided
over a period of time? Provisions relating to ‘time of supply’ provide answers to all
such and other questions that arise with respect to the time when the liability to pay
CGST and SGST/UTGST (intra-State supply) or IGST (inter-State supply) arises. In other
words, time of supply indicates the point in time when the liability to pay tax arises. It
is important to note here that though the liability to pay tax arises at the time of supply,
the same can be paid to the Government by the due dates prescribed with reference
to the said ‘time of supply’. For instance, if time of supply of a given supply is 25
th
May, the tax leviable thereon would be payable latest by 20
th
June, which is the due
date prescribed in the CGST Act for suppliers filing GST return on monthly basis.
1
The CGST Act provides separate provisions for time of supply for goods and services
vide sections 12 and 13 respectively. Section 14 provides for the method of
determining the time of supply in case there is a change in the rate of tax on supply of
goods or services.
2
Sections 12 and 13 employ the provisions of section 31 relating to
issue of tax invoice as a reference point. Therefore, it will be useful to read this Chapter
in conjunction with the provisions relating to tax invoice discussed in detail in Chapter
10: Tax Invoice, Credit and Debit Notes in Module 2 of this Study Material.
Events like issue of invoices, receipt of payment, provision of service, receipt of services
as recorded in books of account need to be analysed to determine the time of supply
when the tax on supply is payable under forward charge. When the tax on supply is
payable under reverse charge, events like date of receipt of goods or services, date of
making payment, date of issue of invoice etc. need to be analysed to determine the
time of supply. The provisions relating to time of supply essentially fix the tax
collection event to the earliest possible time.
In the subsequent pages of this Chapter, sections 12 and 13 are extracted, followed by
their analysis, to understand how to determine the time of supply of goods and
services respectively. When studying the statutory provisions, the definitions
(extracted first) must also be referred to simultaneously, so as to understand the
precise meaning of the terms used.
1
Provisions relating to due date for payment of tax have been discussed in Chapter 13: Payment
of Tax in Module 2 of this Study Material.
2
Provisions of section 14 relating to determination of time of supply in case of change in rate of
tax in respect of supply of goods or services will be discussed at the Final level.
© The Institute of Chartered Accountants of India
a
6.4
GOODS AND SERVICES TAX
2. RELEVANT DEFINITIONS
? Associated enterprises shall have the same meaning as assigned to it in
section 92A of the Income-tax Act, 1961 [Section 2(12)].
Broadly, an associated enterprise in relation to another enterprise, means
an enterprise which participates, directly or indirectly, or through one or
more intermediaries, in the management or control or capital of the other
enterprise.
? Document includes written or printed record of any sort and electronic
record as defined in clause (t) of section 2 of the Information Technology
Act, 2000 [Section 2(41)].
? Invoice or tax invoice means the tax invoice referred to in section 31
[Section 2(66)].
? Goods means every kind of movable property other than money and
securities but includes actionable claim, growing crops, grass and things
attached to or forming part of the land which are agreed to be severed
before supply or under a contract of supply [Section 2(52)].
Provisions of time of supply under CGST Act have also been made
applicable to IGST Act vide section 20 of the IGST Act.
GOODS
All kind of movable property
Money & Securities
Actionable claim, Growing Crops, Grass & Things
forming part of land agreed to be severed before
supply or under a contract of supply
MEANS
EXCLUDES
INCLUDES
© The Institute of Chartered Accountants of India
Page 5
CHAPTER
6
LEARNING OUTCOMES
a
a
CHAPTER
6
TIME OF SUPPLY
The section numbers referred to in the Chapter pertain to the CGST Act, 2017, unless
otherwise specified. Examples/illustrations/Questions and Answers given in the
Chapter are based on the position of GST law existing as on 30.04.2023.
After studying this Chapter, you will be able to identify the
point in time when the liability to pay GST arises -
? on supply of goods or services where GST is payable under
forward charge
? on supply of goods or services where GST is payable under
reverse charge
? on supply of vouchers exchangeable for goods and services
? on supply of goods and services in residual cases
? in case of enhancement of value of supply on account of
interest, late fee/penalty paid for delay in payment of
consideration
? apply the concepts relating to time of supply of goods and/or
services in problem solving
© The Institute of Chartered Accountants of India
a
6.2
GOODS AND SERVICES TAX
1. INTRODUCTION
GST is payable on supply of goods or services. A
supply consists of elements that can be separated in
time, like purchase order / agreement, dispatch (of
goods), delivery (of goods) or provision or
performance of service, entry in the records,
payment, and entry of the payment in the records or
deposit in the bank.
So, the question that arises is - at what point of time
in the aforesaid transaction, the GST becomes payable? Does it become payable when
an agreement to supply goods or services is made, or when the goods are shipped or
the services are provided, or when the invoice is issued or when payment is made?
Time of Supply
Time of supply of goods
Time of supply under forward
charge
Time of supply under reverse
charge
Time of supply of vouchers
exchangeable for goods
Time of supply in residual cases
Time of supply of services
Time of supply under forward
charge
Time of supply under reverse
charge
Time of supply of vouchers
exchangeable for services
Time of supply in residual cases
CHAPTER OVERVIEW
© The Institute of Chartered Accountants of India
6.3
TIME OF SUPPLY
a a
6 3
6.3
What if the goods are shipped over a period of time? What if the service is provided
over a period of time? Provisions relating to ‘time of supply’ provide answers to all
such and other questions that arise with respect to the time when the liability to pay
CGST and SGST/UTGST (intra-State supply) or IGST (inter-State supply) arises. In other
words, time of supply indicates the point in time when the liability to pay tax arises. It
is important to note here that though the liability to pay tax arises at the time of supply,
the same can be paid to the Government by the due dates prescribed with reference
to the said ‘time of supply’. For instance, if time of supply of a given supply is 25
th
May, the tax leviable thereon would be payable latest by 20
th
June, which is the due
date prescribed in the CGST Act for suppliers filing GST return on monthly basis.
1
The CGST Act provides separate provisions for time of supply for goods and services
vide sections 12 and 13 respectively. Section 14 provides for the method of
determining the time of supply in case there is a change in the rate of tax on supply of
goods or services.
2
Sections 12 and 13 employ the provisions of section 31 relating to
issue of tax invoice as a reference point. Therefore, it will be useful to read this Chapter
in conjunction with the provisions relating to tax invoice discussed in detail in Chapter
10: Tax Invoice, Credit and Debit Notes in Module 2 of this Study Material.
Events like issue of invoices, receipt of payment, provision of service, receipt of services
as recorded in books of account need to be analysed to determine the time of supply
when the tax on supply is payable under forward charge. When the tax on supply is
payable under reverse charge, events like date of receipt of goods or services, date of
making payment, date of issue of invoice etc. need to be analysed to determine the
time of supply. The provisions relating to time of supply essentially fix the tax
collection event to the earliest possible time.
In the subsequent pages of this Chapter, sections 12 and 13 are extracted, followed by
their analysis, to understand how to determine the time of supply of goods and
services respectively. When studying the statutory provisions, the definitions
(extracted first) must also be referred to simultaneously, so as to understand the
precise meaning of the terms used.
1
Provisions relating to due date for payment of tax have been discussed in Chapter 13: Payment
of Tax in Module 2 of this Study Material.
2
Provisions of section 14 relating to determination of time of supply in case of change in rate of
tax in respect of supply of goods or services will be discussed at the Final level.
© The Institute of Chartered Accountants of India
a
6.4
GOODS AND SERVICES TAX
2. RELEVANT DEFINITIONS
? Associated enterprises shall have the same meaning as assigned to it in
section 92A of the Income-tax Act, 1961 [Section 2(12)].
Broadly, an associated enterprise in relation to another enterprise, means
an enterprise which participates, directly or indirectly, or through one or
more intermediaries, in the management or control or capital of the other
enterprise.
? Document includes written or printed record of any sort and electronic
record as defined in clause (t) of section 2 of the Information Technology
Act, 2000 [Section 2(41)].
? Invoice or tax invoice means the tax invoice referred to in section 31
[Section 2(66)].
? Goods means every kind of movable property other than money and
securities but includes actionable claim, growing crops, grass and things
attached to or forming part of the land which are agreed to be severed
before supply or under a contract of supply [Section 2(52)].
Provisions of time of supply under CGST Act have also been made
applicable to IGST Act vide section 20 of the IGST Act.
GOODS
All kind of movable property
Money & Securities
Actionable claim, Growing Crops, Grass & Things
forming part of land agreed to be severed before
supply or under a contract of supply
MEANS
EXCLUDES
INCLUDES
© The Institute of Chartered Accountants of India
6.5
TIME OF SUPPLY
a a
6 5
6.5
? Prescribed means prescribed by rules made under this Act on the
recommendations of the Council [Section 2(87)].
? Reverse charge means the liability to pay tax by the recipient of supply of
goods or services or both instead of the supplier of such goods or services
or both under sub-section (3) or sub-section (4) of section 9, or under sub-
section (3) or sub- section (4) of section 5 of the Integrated Goods and
Services Tax Act [Section 2(98)].
? Services means anything other than goods, money and securities but
includes activities relating to the use of money or its conversion by cash or
by any other mode, from one form, currency or denomination, to another
form, currency or denomination for which a separate consideration is
charged.
Explanation.––For the removal of doubts, it is hereby clarified that the
expression “services” includes facilitating or arranging transactions in
securities [Section 2(102)].
? Recipient of supply of goods or services or both, means—
Goods Money Securities
INCLUDING
Activities
relating to use
of money or its
conversion for a
consideration
SERVICES
Anything
EXCLUDING
MEANS
Activities
facilitating or
arranging
transactions in
securities
© The Institute of Chartered Accountants of India
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