TIME OF SUPPLY

A. Time of Supply for Goods and Services:

1. Goods liable under forward charge

• The time of supply shall be earlier of the following :
  • Date of issue of invoice,;
  • Last date on which invoice is to be issued by the supplier, i.e., either before or at the time of removal of goods for supply or delivery of goods or making the goods available to the recipient;
  • Date on which the payment is received by the supplier (recorded in the books of account or credited in the bank account, whichever is earlier)
• Receipt of advances has been exempted to taxable person having aggregate turnover not exceeding Rs. 1.5 crores vide notification 40/2017 – CT dated 13.10.2017. The same has been extended to all taxable persons vide notification 66/2017 – CT dated 15.11.2017.

2. Goods / liable under reverse charge

• The time of supply shall be earlier of the following :
  • Date of receipt of goods ;
  • Date of payment to the supplier (recorded in the books of account or debited in the bank account, whichever is earlier);
  • Date immediately following 30 days from the date of invoice or any other document issued by the supplier
  • Date of entry in books of account of recipient, where the above clauses do not apply

3. Services liable under forward charge

• The time of supply shall be earlier of the following:
  • Date of issue of invoice, if the invoice is issued before or at the time of supply of service or within the time prescribed under Rule 47;
  • Date of provision of service, if the invoice is not issued within the time prescribed;
  • Date of receipt of payment ( recorded in the books of account or credited in the bank account, whichever is earlier) ;
  • Where the above clauses do not apply, date on which the recipient shows receipt of the service in his books of account.

4. Services liable under reverse charge

• The time of supply shall be earlier of the following :
  • Date of payment to the supplier (recorded in the books of account or debited in the bank account, whichever is earlier)
  • Date immediately following 60 days from the date of invoice or any other document issued by the supplier;
  • Date of entry in books of account of the recipient, where the above clauses do not apply

  In case of associated enterprises, where the supplier of service is located outside India, the time of supply shall be the date of entry in the books of accounts or date of payment, whichever is earlier. ‘Associated enterprises’ shall have the same meaning as assigned to it in Section 92A of the Income Tax Act, 1961.

B. Time of supply for Continuous Supply

In the case of continuous supply, the time of supply is linked to the invoicing requirements under section 31.

1. Continuous supply of goods:

   In case of continuous supply of goods, where successive statements of accounts or successive payments are involved, the invoice shall be issued before or at the time when such successive statements are issued or each such payment is received

2. Continuous supply of services:

   In case of continuous supply of services, Invoice shall be issued:

   • Where due date of payment is ascertainable from the contract – on or before the due date of payment
   • Where due date of payment is not ascertainable from the contract – before or at the time when the supplier receives the payment
   • Where payment is linked to completion of an event – on or before the date of completion of event

C. Others

• In respect of vouchers where the supply is identifiable, the time of supply would be the date of issuance of voucher. In other cases, it would be the date of redemption of voucher.
• The time of supply for 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 the supplier receives the said amount.
• If the time of supply of goods/ services is not determinable under any of the provisions, the same shall be determined as under:
  • If periodical return is to be filed, the date on which such return is to be filed
  • In any other case, the date on which tax is paid

D. Change in rate of tax

• Section 14 deals with the provisions relating to determination of tax rate in cases where there is a change in the rate of tax in respect of goods/services/both based on the following:

(Note: Point of Time for Change in tax rate is denoted as Before or After)

• The date of receipt of payment shall be the date on which the payment is entered in the books of account of the supplier or the date, on which the payment is credited to his bank account, whichever is earlier.

E. Circular in the context of Time of Supply