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MODEL GST LAW
TIME OF SUPPLY OF GOODS
COMPILED BY : CA RAMANDEEP SINGH BHATIA
SECTION-12 TIME OF SUPPLY OF GOODS
(1) The liability to pay CGST / SGST on the goods shall arise at the time of supply as determined in terms of the provisions of this section.
- Triggering event for the payment of Tax.
- Useful when there is change of rate of Tax
- New Levy comes into existence.
(2) The time of supply of goods shall be the earliest of the following dates, namely,-(a) (i) the date on which the goods are removed by the supplier for supply
to the recipient, in a case where the goods are required to be removed or
(ii) the date on which the goods are made available to the recipient, in a case where the goods are not required to be removed; or
SECTION-12 TIME OF SUPPLY OF GOODS
(b) the date on which the supplier issues the invoice with respect to the supply; or
(c) the date on which the supplier receives the payment with respect to the supply; or
(d) the date on which the recipient shows the receipt of the goods in his books of account.
Note-1 Provision of sub clause (ii) of clause (a) Subsection(2) of section 12 will apply in the following instances : -
-Immovable Supply -Supplied in assembled or installed form-Supplied by supplier to his agent or his principal
Note -2 Made available to the recipient means – Goods are placed at the disposal of recipient
SECTION-12 TIME OF SUPPLY OF GOODS
Note :1 Supply of Goods shall deemed to have been made to the extent it is covered by the Invoice & Payment made for the purpose of subsection 2 clause (b) & (c ).
Note : 2 Date of credit by bank or date of entry in the books of account w.e.e will be deemed to be the date of receipt of payment for the purpose of subsection 2 clause (c)
Illustration No.1 Goods -Supply of Shampoo / Detergent-(Movable Goods)
Case No
Date of Removal
Date of Invoice
Date of Payment
Date of Receipt Show by Recipient
Time of Supply
1) 25/08/2017 31/08/2017 -Bank Credit – 5/09/2017 - Books – 04/09/2017
01/09/2017 25/08/2017
SECTION-12 TIME OF SUPPLY OF GOODSIllustration No.1 Goods -Supply of Shampoo / Detergent (Movable Goods)
Case No
Date of Removal
Date of Invoice
Date of Payment
Date of Receipt Show by Recipient
Time of Supply
2) 25/08/2017 21/08/2017 -Bank Credit – 5/09/2017 - Books – 04/09/2017
01/09/2017 21/08/2017
3) 25/08/2017 31/08/2017 -Bank Credit 19/08/2017
Books – 16/08/2017
01/09/2017 16/08/2017
4) 25/08/2017 31/08/2017 -Bank Credit – 5/09/2017
Books – 04/09/2017
23/08/2017 23/08/2017
SECTION-12 TIME OF SUPPLY OF GOODS
Illustration No.2 Goods -Supply of Lifts / Escalators
Case No
Date of Removal
Date on Made
Available
Date of Invoice
Date of Payment
Date of Receipt Show by Recipient
Time of Supply
1) 25/08/17 31/10/17 02/11/17 - Bank Credit –
08/11/17 - Books –
04/11/17
04/11/17 31/10/17
SECTION-12 TIME OF SUPPLY OF GOODSIllustration No.3 Goods -Supply of Lifts / Escalators
Contract Price is Rs.5,00,000/- Payment details are below,
1) Advance – Rs.2,00,000/- Date-20/08/172) Trial Run- Rs. 2,00,000/- Date -15/10/173) Final Finishing Complete-Rs. 1,00,000/- Date – 10/11/17
Case No
Date of Removal
of Parts/Raw Material
Date on Made
Available
Date of Invoice
Date of Payment
Date of Receipt Show by Recipient
Time of Supply
1) 25/08/17 31/10/17 02/11/17 - As per above Details
04/11/17 a) Rs. 2 Lac- 20/08/17
b) Rs.2 Lac-15/10/17
c) Rs.1 Lac-31/10/17
SECTION-12 TIME OF SUPPLY OF GOODS(3) In case of continuous supply of goods, where successive statements of accounts or successive payments are involved, the time of supply shall be the date of expiry of the period to which such successive statements of accounts or successive payments relate. If there are no successive statements of account, the date of issue of the invoice (or any other document) or the date of receipt of payment, whichever is earlier, shall be the time of supply.
(4) For the purposes of sub section (3) above, the Central or a State Government may, on the recommendation of the Council, specify, by notification, the supply of goods that shall be treated as continuous supply of goods;
Example of Such : Supply of Filter Water Canes in Offices daily to be billed on 16th of every month.
SECTION-12 TIME OF SUPPLY OF GOODSIllustration No.4 Goods – Assemble GoodsContract Price is Rs.25,00,000/- Payment & Invoice details are below,
SR Detail of Payment Date of Payment Date of Invoice
Time of Supply
1) Mobilization Advance – Rs.2.5 Lacs
20/08/17 - 20/08/17
2) Stage -1 –Rs.10.00 Lacs
15/10/17 01/10/17 01/10/17
3) Stage -2-Rs.7.5 Lacs 02/12/17 Credited by Bank30/11/17-Cheque Received
04/12/17 30/11/17
4) Finishing-Rs.5.00 Lacs
15/01/18 Credited by Bank13/01/18-Cheque Received
01/01/18 01/01/18
SECTION-12 TIME OF SUPPLY OF GOODS(5) In case of supplies in respect of which tax is paid or liable to be paid on reverse charge basis, the time of supply shall be the earliest of the following dates, namely—
(a) the date of the receipt of goods, or(b) the date on which the payment is made, or(c) the date of receipt of invoice, or(d) the date of debit in the books of accounts.
1) Triggering event -Entry to the Quantitative records, for ex if u have made GRN .
2) Date of Invoice v/s Date of receipt of Invoice.3) Payment- Book entry or Bank Debit which ever is earlier.
SECTION-12 TIME OF SUPPLY OF GOODSIllustration No.5 Goods – Reverse Charge Basis
Case No
Date of Receipt of
Goods
Date of Receipt of
Invoice
Date of Payment
Date of Debit by Recipient
Time of Supply
1) 30-08-17 29-08-17Date of Invoice-
21-08-17
-Bank Debit – 05-09-17 - Books –
04-09-17
01-09-17 29-08-17
2) 30-08-17 01-09-17Date of Invoice-
21-08-17
-Bank Debit – 05-09-17 - Books –
04-09-17
01-09-17 30-08-17
3) 30-08-17 01-09-17Date of Invoice-
21-08-17
-Bank Debit – 09-08-17 - Books –
04-08-17
01-09-17 04-08-17
SECTION-12 TIME OF SUPPLY OF GOODS(6) If the goods (being sent or taken on approval or sale or return or similar terms) are removed before it is known whether a supply will take place, the time of supply shall be at the time when it becomes known that the supply has taken place or six months from the date of removal, whichever is earlier.
1) This section will play key importance in case of E-Commerce trade where goods are mainly sold on approval or return basis.
2) If the period of return is less than 6 month than , expiry of such shorter period will be taken as Supply has taken place. For ex. Cell Phone sold be ecommerce website , return period is 10 days.
(7) In case it is not possible to determine the time of supply under the provisions of subsection (2), (3), (5) or (6), the time of supply shall
(a) in a case where a periodical return has to be filed, be the date on which such return is to be filed, or(b) in any other case, be the date on which the CGST/SGST is paid.
13
Disclaimer: The views and opinions expressed in the slides are those of the compiler and do not necessarily reflect the official policy or position of any agency/department of the government. All possible efforts are made to make the compilation error free and incase if there is any left , we regret for the same and request to point out the same at our mail id.
CA RAMANDEEP SINGH BHATIA
Qualifications :
FCA, CS (EXE) , BCOM,CERT. IFRS, CERT. IDT, CERT. CBA, DISA
Associated to:
-Trainer ICAI Raipur- GMCS/OTC/ITT- Trainer MCA Investor Awareness Program- Editor Newsletter Income Tax Bar Association Raipur- Vice President (Training) – JCI Raipur Capital- Executive Member of Governing Board of CG IDT Association
+919827152729 [email protected]
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