Chapter 5 - Time of Supply Flashcards
Why is TOS important ?
The liability to pay tax arises as per the TOS i.e. as soon as a person meets the conditions of TOS a supply is deemed to have taken place and such person thereby becomes liable to pay tax.
It is because of TOS we are able to ascertain the due date for paying the GST to govt.
Generally the due date of payment of tax in case of GST in 20th of the next month.
Which sections relate to TOS ?
12, 13 and 14
12 - TOS in case of goods
13 - TOS in case of services
14 - TOS in case of change in rate of tax
How is TOS determined in case of GOODS (General Rule)?
Its simple, as a general rule
TOS in case of goods = Date of invoice.
Date of INVOICE = Earlier of :-
a) Actual date of issue of invoice
b) last date on which invoice is ought to be issued u/s 31
Last date to issue invoice as per sec 31 :-
a) in case of movement of goods - Invoice shall be issued on or before the date of removal of goods.
b) in case of no movement of goods - Invoice shall be issued on or before the date of Delivery of goods/ making the goods available.
c) In case of goods sent on approval basis :- Invoice shall be issued at earlier of :-
1. on or before the time of supply (i.e. when such goods are approved)
2. 6 months from date of removal.
How is TOS determined in case of goods which are covered under RCM ?
TOS in case of goods under RCM = Earliest of the following 3 dates :-
1. Date of receipt of goods.
2. Date of payment.
3. 31st day from the date of issue of invoice.
Note :- If none of the above 3 dates are determinable then TOS = date on which such goods are recorded in the books of accounts of the receiver.
Note :- Date of payment = Earlier of the following :-
a) Date on which payment is recorded in the books of accounts by the receiver.
b) Date on which the bank account is debited of that of the receiver.
How is TOS determined in case of vouchers ?
The TOS in case of vouchers is determined as follows :-
a) If Supply by the way of voucher is identifiable :- TOS = Date of issue of voucher
b) If supply by the way of voucher is unidentifiable :- TOS = Date of redemption of voucher.
How is TOS determined in residuary cases ?
residuary cases are those situations in which the parameters laid down for determination of TOS are unascertainable so in such cases TOS is determined in the following manner :-
a) If periodical returns are filed :- TOS = Due date of filing the returns.
b) In all other cases :- TOS = Date on which Tax is paid.
What is the TOS for the value addition by way of interest or late fee or penalty charged by supplier ?
The TOS for such value addition is the Date on which such value addition is received by the supplier.
How is TOS determined in case of services covered under RCM
TOS in case of services under RCM = earlier of the follows :-
1. Date of payment.
2. 61st day from the date of issue of invoice.
Note :- if one of the above are determinable then TOS = date of entry in the books of account of the recipient.
Note :- Date of payment = earlier of the following :-
a) date on which payment was recorded in the books of accounts of recipient.
b) date on which the bank account was debited.
How is TOS determined in case of import of services between associated enterprises?
if services are imported by an enterprise from its associate enterprise located outside then TOS for such services shall be earlier of the following :-
a) Date on which the entry wrt to such service is made in the books of accounts of recipient.
b) Date of payment
Note :- Date of payment = same as discussed.
How is TOS determined in case of services in general (General rule) ?
The TOS is determined as follows :-
1. If invoice is issued within** time limit** then earlier of the following :-
a) Date of invoice
b) Date of payment
- If invoice is not issued within time limit then earlier of the following :-
a) Date of completion/Provision of services.
b) Date of payment.
*Note *:- Date of payment is little different here :- It is earlier of the following :-
a) Date of entry of payment in the books of supplier.
b) Date on which the bank account of the supplier is credited.
Note :- If none of the above particulars are ascertainable then TOS in such case shall be the date of entry in the books of accounts of the recipient.
What is time limit for issuing invoice in case of supply of services ?
- In case of services the time limit for issuing invoice is prescribed under section 31. The invoice shall be issued within 30 days from the date of completion/Provision of services.
Note :- in case of services provided by NBFCs, Financial institutions, banking companies, insurance companies the words 30 days will be read as 45 days.
- In case of cessation of services before completion the invoice for the value of work done is to be issued at the time when such supply ceases.
How is TOS determined in case of Goods/Services supplied on continuous basis ?
1.The term Continuous supply of Goods /Services has been defined under GST and the same will be discussed in the Tax Invoice chapter.
- In case of continuous supply of goods :- invoice shall be issued on or before :-
issuance of periodical statement or Receipt of periodical payment. - In case of continuous supply of services :-
a) if due date of payment is ascertainable from the contract then invoice shall be issued on or before due date of payment.
b) if due date of payment is unascertainable then invoice shall be issued on or before the date of payment.
c) if payment is linked to a milestone or event then invoice shall be issued on or before completion of such milestone or event.
How is TOS determined in case of change in tax rates ?
In case of change in rate of tax 3 dates become very important :-
1. Date of invoice
2. Date of payment
3. Date of Actual Supply of Goods/Services.
Now, the TOS is determined by considering whether the above dates fall before or after the date of change in rate of tax.
the simple rule to be used here is :-
1. The TOS becomes that date which goes with Date of Actual Supply
2. If nothing goes with Date of service Then Earlier of Date of invoice/date of payment will become TOS.
3. If all the 3 dates either fall before or fall after the date of change in rate of tax then Section 14 is NA in such situation follow section 12 & 13 accordingly.
4. TOS here becomes crucial for determining which rate of tax will be applicable on such supply.
Note :- Date of payment in general meant the earlier of date on which entry was made in the books of accounts or date on which payment was debited/credited but if such crediting/debiting takes place after 4 working days of change in rate of tax then the Date of payment = Date of such crediting/debiting.
Note :- section 14 is NA in case of Goods (under FCM) as TOS in case of Goods (under FCM) only considers date of invoice as a parameter.
