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What is Time and Supply of Goods?

It is the time Sale of goods will become taxable under GST

IF Time and Supply of Goods is in September that means goods become taxable in September.

We will take the same in September computation and tax on it will be paid in October

Note :- In Service Tax, there was similar concept earlier which was called Point of Taxation.

Time and suplly images.jpg

When is GST Payable?

  • Is it at the time of Sales?
  • Is it at the time of Issue of Invoice?
  • Is it at the Time of Receipt of Money?

This is determined with the help of Section 12 of CGST Act


What is Time of Supply as per Section 12 of CGST Act?

Time of Supply is

Earlier of

  • Date of Invoice
  • Last Date of Issue of Invoice
  •  Date of Payment

Note:-

Last Date of Issue of Invoice is

CASE

LAST DATE OF ISSUE OF INVOICE

When Supply Involves movement of Goods

(Goods Delivered to Customer)

Time of Removal of Goods

(Time of sending goods to recipient)

Other Cases (Goods taken from Shop)

At the time of delivery of goods to recipient (customer)


What is Date of payment

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It is

Date of Receipt of Amount in Bank Account

Or

Date of Debit by Recipient

Whichever is earlier

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Example 1

Suppose Goods Sold to Customer on 10 May but received by Customer on 11 May. The Bill issued to Customer on 15 May. Amount is received from customer on 20 May by cheque which was cleared on 22 May

What is last date of issue of Invoice

-a-

Last date of issue of invoice is date of Removal of Goods for Supply to Recipient I,e,10 May

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What is Date of payment

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It is

Date of Receipt of Amount in Bank Account:-22 May

Or

Date of Debit by Recipient: - 20 May

Whichever is earlier :- 20 May

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What is Time of Supply?

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Time of Supply is

Earlier of

  • Date of Invoice:- 15 May
  • Last Date of Issue of Invoice :-10 May
  • Date of Payment :- 20 May

Hence, Time of Supply is 10 May

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Example 2 :- Amount Received in Advance

Suppose Company entered into a Contract to Sell goods for Rs 100000+ 3% CGST+2% SGST

It received full payment in advance on 20 July by NEFT

Goods taken by Customer from shop on 18 September and Invoice issued Same Date  

What is last date of issue of Invoice

-a-

It is date of Delivery of goods i.e. 18 September

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What is Time of Supply?

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Time of Supply is

Earlier of

  • Date of Invoice:- 18 September
  • Last Date of Issue of Invoice :-18 September
  • Date of Payment :- 20 July

Hence, Time of Supply is 20 July

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RECEIPT OF PARTIAL ADVANCE

Suppose Company entered into a Contract to Sell goods for Rs 100000+ 3% CGST+2% SGST

It received 20% payment in advance on 20 July

Goods taken by Customer from shop on 18 September and Invoice issued Same Date

Balance Payment made on 11 November

What is last date of issue of Invoice

-a-

It is date of Delivery of goods i.e. 18 September

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What is Time of Supply?

-a-

Time of Supply will be calculated separately for 20% Advance and 80% Balance Payment

TYPE OF ADVANCE

20%

80%

1.DATE OF INVOICE

18 Sep

18 Sep

2.LAST DATE OF INVOICE

18 Sep

18 Sep

3.DATE OF PAYMENT

20 July

11 November

TIME OF SUPPLY (Earlier of 3 )

20 July

18 Sep

 

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SMALL AMOUNT RECEIVED IN ADVANCE UPTO Rs 1000

Example:-

Suppose Sales Service Provided for Rs 1000+12% CGST+6% SGST

Total Amount Due =1000+120+60=1180

Customer paid   lumpsome 1200 .  He asks to adjust balance 20 in next bill

Hence 20 Received in Advance from Customer

Does the company need to pay tax on this 20 Extra Received?

-a-

 It is optional to Customer

It can either pay tax on this 20 Advance now

Or

Later at the time of next bill

This facility is available only if advance amount is upto 1000

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  1. GST - Goods and Services Tax, India
  2. GST Computation & Accounting
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About the Author

CA Maninder Singh's photo - Expert in Practical Accounts, Taxation and Efiling
CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 7 years. He provides courses for Practical Accounts, Taxation and Efiling at teachoo.com .
  • SHIVAJI GANGONE's image
    SHIVAJI GANGONE
    Oct. 15, 2017, 1:45 a.m.
    Date of purchase biling is 30-09-2017
    But stock sent to me on 2-10-2017
    Received on 4-10-2017
    Here I am showing the purchase in October
    Is it correct
    View answer
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