Time of Supply for Goods | Taxation for CA Intermediate PDF Download

In order to calculate and discharge tax liability it is important to know the date when the tax liability arises i.e. the date on which the charging event has occurred. In GST law, it is known as Time of Supply. GST law has provided separate provisions to determine the time of supply of goods and time of supply of services. Sections 12, 13 & 14 of the CGST Act, 2017, deals with the provisions related to time of supply and by virtue of section 20 of the IGST Act, 2017 related to time of supply.
As per section 12 of CGST Act 2017, the liability to pay tax on goods shall arise at the time of supply as determined in accordance with the provisions of this section. CGST/SGST or IGST must be paid at the time of supply. Goods and services have a separate basis to identify their time of supply. It can be understood as:

Time of Supply for Goods (Section 12)

1. According to section 12(2) of CGST Act in case of supplies in respect of which tax is paid or is liable to be paid on forward basis the time of supply of goods shall be the earlier of the following dates namely

• The date of issue of invoice by the supplier or 
• The last date on which he is required to issue the invoice with respect to the supply as per section 31(1) or 
• The date on which the supplier receives the payment with respect to the supply (which also means the date on which the payment is recorded in the books of account of the entity or supplier)

For better understanding of the above provision it is better to understand section 31(1) to know the last date on which supplier is required to issue the invoice. As per sec 31(1) a registered person supplying taxable goods shall “Before or at the time of”

• Removal of goods for supply to the recipient where the supply involves movement of goods or 
• Delivery of goods or making available thereof to the recipient in any other case supplier shall issue by invoice

For Example:

Mr. X sold goods to Mr. Y worth Rs 100000. The invoice was issued on 15th January. The payment was received on 31st January. The goods were supplied on 20th January. The time of supply in this case: Time of supply is earliest of –

• Date of issue of invoice = 15th January 
• Last date on which invoice should have been issued = 20th January (delivery of goods) 
• Date of receipt of advance/payment = 31st January Thus the time of supply is 15th January.

What will happen if, in the same example an advance of Rs 50,000 is received by Mr. X on 1st January?
The time of supply for the advance of Rs 50,000 will be 1st January (since the date of receipt of advance is before the invoice is issued). For the balance Rs 50,000, the time of supply will be 15th January.
In continuation of the above section 12(2) of CGST Act in case of continuous supply of goods shall be the earlier of the following dates namely:

• Time when each invoice is issued or 
• Time when each statement is received (like credit card statement) 
• Time when each payment is received

 2. According to section 12(3) of the CGST Act 2017 in case of supplies in respect of which tax is paid or is liable to be paid on reverse charge basis then time of supply would be the earliest of the following date

• The date of receipt of goods or 
• The date of payment as entered in the books of accounts of the recipient or 
• The date on which the payment is debited in recipient’s bank account or 
• The date immediately following thirty days from the date of issue of invoice or an y other document by whatever name called in lieu thereof by the supplier

Provided that when it is not possible to determine the time of supply under above clause then the time of supply shall be the date of entry in the books of accounts of the recipient of supply.

3. According to section 12(4) of the CGST Act 2017 in case of vouchers exchangeable for goods then time of supply would be the earliest of the following date

• The date of issue of voucher, if the supply is identifiable at that point or
• The date of redemption of the voucher in all other cases

 4. According to section 12(5) of the CGST Act 2017 in residual case, where none of the provisions of sub-sections 2 to 4 of section 12 can be applied, the time of supply would be fixed as following date

• Due date of filing the periodical returns or 
• In any other case, date on which GST is paid

5. According to section 12(6) of the CGST Act 2017 in cases related to an addition in the value of supply by way of interest, late fees or penalty, the time of supply would be fixed as:

• Time of supply related to an addition in the value of supply by way of interest, late fee or penalty for delayed payment of any consideration shall be the date on which suppliers receives such addition in value.  
• For example a supplier receives consideration in the month of September instead of due date of July and for such delay he is eligible to receive an interest amount of `1000/- and said amount is received on 15.12.2017. The time of supply of such amount (`1000/-) will be the 15.12.2017 i.e. the date on which it is received by the supplier and tax liability on this is to be discharged by 20.01.2018.