Time of Supply and Suspension of RCM

[CAPurnima Bothra]

As per time of supply provisions in case of reverse charge, the time of supply for services shall be the earliest of the following dates-
(a) the date of payment OR
(b) the date immediately after sixty days from the date of issue of the invoice by the supplier.

Now RCM is suspended w.e.f.13th Oct.

I have received an invoice date 10th August.Time of supply triggers on 9th Oct.So am I supposed to pay GST under RCM on the same.If yes by when?request you to throw some light on this topic.

[Rajagopalan Ranganathan]

Madam,

According to Section 12 (3) of CGST Act, 2017-

" 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 of payment as entered in the books of account of the recipient or the date on which the payment is debited in his bank account, whichever is earlier; or

(c) the date immediately following thirty days from the date of issue of invoice or any other document, by whatever name called, in lieu thereof by the supplier:

Provided that where it is not possible to determine the time of supply under clause (a) or clause (b) or clause (c), the time of supply shall be the date of entry in the books of account of the recipient of supply."

Therefore you have to pay the tax on or before 10.9.2017. If you pay now you have to pay interest for delayed payment.

Notification No. 38/2017 – Central Tax (Rate) dated 13.10.2017 amends Notification No.8/2017- Central Tax (Rate), dated the 28th June, 2017. This amendment is prospective in effect. Invoices issued prior to this date are liable to payment of tax under reverse charge if required by law.

[DR.MARIAPPAN GOVINDARAJAN]

You have to pay the tax.

[KASTURI SETHI]

I support the views of both experts.

AI Summary

Time of supply under reverse charge fixes tax liability; pre-suspension invoices remain liable and attract interest if delayed. Time of supply for services under the reverse charge is the earliest of receipt, payment in the recipient's books or bank account, or the invoice-based trigger; a suspension of reverse charge is prospective and does not relieve tax liability for supplies whose time of supply falls before suspension. The recipient must pay tax by the time of supply date and will incur interest for delayed payment.