Point of Taxation Rules-Under GST

 

Time of Supply of Services under GST(Chapter IV of Act-POT) :-

Time of Supply is the time when goods have been deemed to be supplied or services have been deemed to be provided.

The first step in GST compliance is Filling of return and we all know while filling our returns we need some basic thing like Taxable value ,Tax rate, Interest/penalty(if any),Inputs etc.

For a particular return we must know the period(Month) of output or Input is falling in that period.

In that case the Superhero Point of Taxation(POT) rules comes into existence . It enable us to determine exact period of supply of Goods or services.

Lets Understand these one bye one.

Time of supply under reverse charge:

 

Reverse charge means the liability to pay tax is by the recipient of goods/services instead of the supplier. In case of reverse charge, the time of supply shall be the earliest of the following dates—

(a) The date of payment OR

(b) The date immediately after SIXTY (60) days from the date of issue of invoice by the supplier (30 days for goods) If it is not possible to determine the time of supply under (a), (b) or

(c), the time of supply shall be the date of entry in the books of account of the receiver of service.

 

For clause (a)- the date of payment shall be earlier of- 1. The date on which the recipient entered the payment in his books OR 2. The date on which the payment is debited from his bank account

Time of supply under forward charge:

The time of supply of services shall be the earlier of the following dates:

 

(a)    If invoice is issued within the period prescribed Period*,

The date of issuing invoice OR

The date of receipt of payment

                                            -whichever is earlier

 

The date of issuing invoice -30/11/2021

The date of receipt of payment -15/11/2021

-          POT-  15/11/2021

 

 

(b)   If invoice is NOT issued within the period prescribed*,

The date of provision of service OR

The date of receipt of payment

                                             – Whichever is earlier

 

The date of provision of service -15/11/2021

The date of receipt of payment- 25/11/2021

                                             –POT- 15/11/2021

 

 

(c) Where the provisions of clause (a) or (b) do not apply, The date on which the recipient shows the receipt of services in his books of account *before the provision of service, or within 30 days after the provision of service, as per invoice rules (other than insurance or banking companies, or financial instutions).

 

Note-If the supplier of taxable service receives an amount up to Rs. 1000 rupees in excess of invoice amount, the time of supply for the extra amount shall be the date of issue of invoice (at the option of the supplier). For clauses (a) and (b)- (i) The supply shall be assumed to have been made to the extent it is covered by the invoice or the payment (as the case may be). (ii) The date of receipt of payment shall be earlier of- -The date on which he entered the payment in his books OR – The date on which the payment is credited to his bank account. Example:

 

Date of invoice 15th Oct 2021

Date of receipt of payment 10th Nov 2021

Date when supplier recorded receipt in books 11th Nov 2021

Time of supply will be 15th Oct 2021