Why is Time of Supply Important?

It helps in Determining when GST is payable

Suppose Time of Supply is of AUGUST, it means it is GST Liability of Aug to be paid in September

 

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 MayCalcuate Time of Supply

Calculate Time of Supply

Particular Date
Date of Invoice  
Last Date of Issue of Invoice  
 Date of Payment  
Time of Supply(Earlier of 3)  

Answer

Particular Date
Date of Invoice 15-May
Last Date of Issue of Invoice 10-May
 Date of Payment 20-May
Time of Supply(Earlier of 3) 10-May


Example 2 :- Amount Received in Advance

Suppose Company entered into a Contract to Sell goods for Rs 100000+ 2.5% CGST+2.5% SGST

It received full payment in advance on 20 July by NEFT

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

Calculate Time of Supply

Particular Date
Date of Invoice  
Last Date of Issue of Invoice  
 Date of Payment  
Time of Supply(Earlier of 3)  

Answer

Particular Date
Date of Invoice 18-Sep
Last Date of Issue of Invoice 18-Sep
 Date of Payment 20-Jul
Time of Supply(Earlier of 3) 20-Jul


Example 3 :- Partial Amount Received in Advance

Suppose Company entered into a Contract to Sell goods for Rs 100000+ 2.5% CGST+2.5% 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

Particular 20% 80%
Date of Invoice    
Last Date of Issue of Invoice    
 Date of Payment    
Time of Supply(Earlier of 3)    

Answer

Particular 20% 80%
Date of Invoice 18-Sep 18-Sep
Last Date of Issue of Invoice 18-Sep 18-Sep
 Date of Payment 20-Jul 11-Nov
Time of Supply(Earlier of 3) 20-Jul 18-Sep

  1. GST - Goods and Services Tax, India
  2. GST Computation & Accounting
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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 8 years. He provides courses for Practical Accounts, Taxation and Efiling at teachoo.com .