TaxTMI 
TaxTMI 
TaxTMI 
Background –
Point of taxation means the point in time when goods have been deemed to be supplied or services have been deemed to be provided. The point of taxation enables us to determine the rate of tax, value, and due dates for payment of taxes.Under GST the point of taxation, i.e., the liability to pay CGST / SGST, will arise at the time of supply as determined for goods and services.
Sr. No. | Particulars | Goods | Services |
1 | Normal mechanism if invoice issued in time(See Note 1) | Earlier of two:
| Earlier of two:
|
Normal mechanism if invoice not issued in time | Earlier of two:
| Earlier of two:
| |
Others |
| Date as per books | |
2 | Reverse charge mechanism | Earlier of following:-
Where above mentioned points are not possible, date of entry in books of recipient is considered | Earlier of following:-
Where above mentioned points are not possible, date of entry in books of recipient is considered |
In case of associated enterprise outside India |
| Date of supply should be earlier of two :-
| |
3 | Supply of vouchers (See note 3) Identifiable supply Other cases | Date of issuance of voucher Date of redemption of voucher | Date of issuance of voucher Date of redemption of voucher |
4 | Other or residual In case periodical return to be filed Other case | Date on which such return is to be filed Date on which tax is to be paid | Date of return on which it is to be filed Date on which tax is to be paid |
5 | In case of addition to the supply(by way of interest, penalty or late fees) | Date of supply to the extent of addition should be date on which supplier receives such addition. | Date of supply to the extent of addition should be date on which supplier receives such addition |
Notes
- In case the supplier receives amount up to INR 1000 in excess of invoice amount, then he can opt the date of Invoice in respect of such excess
- “Supply” shall bedeemed to have been made to the extent it is covered by the invoice or, as the case may be, the payment.
- Date of receipt of payment will be earlier of two:-
- Date on which entry entered in books of accounts or
- Date on which payment credited to bank account
- “voucher” means an instrument where there is an obligation to accept it as consideration or part consideration for a supply of goods or services or both and where the goods or services or both to be supplied or the identities of their potential suppliers are either indicated on the instrument itself or in related documentation, including the terms and conditions of use of such instrument;
E.g. – Gift voucher by jeweller which can be redeemed for purchase of gold – As goods which are supplied are identifiable at point of issue – Time of supply will be date of issuing gift voucher
E.g. – Gift Voucher by Shoppers Stop which can be redeemed for purchase of vide range of goods supplied by it– As goods which are supplied are not identifiable at point of issue – time of supply will be date of redemption of gift voucher
Time limit for issue of invoice
Sr. No. | Particulars | Situation | Time limit |
1 | In case of supply of goods | Supply involving movements of goods | Before or at the time of removal of goods for supply to the recipient |
Other cases | Before or at the time of delivery of goods or making available thereof to the recipient | ||
2 | In case of continuous supply of goods | Having successive statements of accounts | Before or at the time ofeach such statement is issued or |
Successive payments | Before or at the time of each such payment is received | ||
3 | In case of supply of services | Banking company or Financial/Non-financial institutions | Before or within 45 days from date of supply of service |
Other cases | Before or within 30 days from date of supply of service | ||
Supply between distinct persons in case of insurance or banking company or financial institution including NBFC or telecom operator or class of supplier as notified by government | When such supplier records the same in his books of account or before the expiry of the quarter during which the supply was made. | ||
4 | In case of continuous supply of services | Due date of payment is ascertainable | On or before the due date of payment |
Due date of payment is not ascertainable | On or before such time when the supplier of service receives the payment | ||
Payment is linked to the completion of an event | Onor before completion of that event | ||
5 | Other | In a case where the supply of services ceases under a contract before the completion of the supply | At the time when the supply ceases |
Where the goods being sent or taken on approval for sale or return are removed before the supply takes place | Before or at the time of supply or six months from the date of removal, whichever is earlier |
Time of supply in case of change of rate
Sr. No. | Invoice | Payment | Supply before change of rate | Supply after change of rate |
1 | After | After | Earlier of following two:- Date of invoiceor Receipt of payment | NA |
2 | Prior | After | Date of issue of invoice | Date of receipt of payment |
3 | After | Prior | Date of receipt of payment | Date of issue of invoice |
4 | Prior | Prior | NA | Earlier of following two:- Date of invoice or Receipt of payment |
Notes:-Date of receipt of payment will be date on which entry credited to bank account if such credit in the bank account is after 4 working days from the date of change in the rate of tax