Works Contract

[Jasbir Uppal]

Dear Professionals,

Works Contract executed in June 2017 , all the materials was consumed but payment will be received in July 2017. The question is whether the tax laws of VAT applicable or the provisions of GST will be applied.

Regards

J S Uppal

Tax Consultant

AI Summary

Time of supply rules determine whether GST applies when payment for a works contract is received after performance.
Under the time of supply rules the time of supply of services is the earliest of: the invoice date (if issued within the prescribed period) or the date of receipt of payment; or the date of provision of service (if invoice not issued) or the date of receipt of payment; or the date the recipient records receipt in its books where the prior clauses do not apply. A proviso allows the supplier to opt for the invoice date for small excess amounts, and the date of receipt of payment is the earlier of entry in books or bank credit.