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.
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
It is
Date of Receipt of Amount in Bank Account
Or
Date of Debit by Recipient
Whichever is earlier
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
View answer
Last date of issue of invoice is date of Removal of Goods for Supply to Recipient I,e,10 May
What is Date of payment
View answer
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
What is Time of Supply?
View answer
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
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
-ea-
What is Time of Supply?
View answer
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
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
-ea-
What is Time of Supply?
View answer
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 |
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?
View answer
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