time of supply for works comtracts

[giri gattupalli]

respected sir,

for a govt works contractor who do civil works such as buildings and bridges for state govt what is the time of supply to rise the gst liability .it is to be noted that govt contractors does not rise any tax invoice against govt departments such as r&b etc

thanking you please discuss

[SHARAD ANADA]

Your service is continuous supply of service. Pl refer Sec 2(33) of CGST Act 2017 as under:

Sec 2 (33) “continuous supply of services” means a supply of services which is provided, or agreed to be provided, continuously or on recurrent basis, under a contract, for a period exceeding three months with periodic payment obligations and includes supply of such services as the Government may, subject to such conditions, as it may, by notification, specify;

The determination of stage of completion of services is an abstract one, unless specifically defined by contract, unlike in the case of goods where the volume of goods supplied can be easily tracked/ identified. Hence, a contract for supply of service spanning over a definite period has been treated as a continuous supply, so that the tax dues are collected periodically.

The law categorically provides for time limit to issue invoices as under:

(a) where due date of payment is ascertainable: On or before the due date of payment;

(b) where the due date of payment is not ascertainable: Before or at the time of receipt of payment;

(c) where the payment is linked to the completion of an event (milestones): On or before the date of completion of that event.

[giri gattupalli]

thanks for your reply.kindly elaborate with example

[giri gattupalli]

respected sir

agreement with r&b department of state govt made in fy 2016-17.

works completed in fy 2016-17.

check measure made by department in april 2017.

but amount of one crore received in 2017 sep( gst period.)

this is the scenario.

please discuss

thanking you

[KASTURI SETHI]

After in agreement with Sh.Sharad Anada' reply, I elaborate as under :

Govt. contractor received the payment for above services in September, 17. In this case, time of supply of services is the date of receipt of payment as per Section 13 (2)(b) & C of CGST Act. Your client was required to issue invoice on the date of the receipt of payment. Govt. contractor is covered under (c) above mentioned in the reply dated 14.2.20 of Sh.Sharad Anada Ji. Service has been completed on the date of payment.

In this context, see Board's Flyer No.13 dated 1.1.18.

[giri gattupalli]

thank you sethi ji

giri gstp

AI Summary

GST Implications for Government Contractors: Time of Supply for Continuous Services Under CGST Act, 2017 Explained A discussion on the Goods and Services Tax (GST) implications for government works contractors, specifically regarding the time of supply for continuous services like civil works. The primary query was about when GST liability arises, given that government contractors do not issue tax invoices against government departments. It was clarified that the time of supply is determined by the CGST Act, 2017, which states that invoices should be issued based on payment schedules or completion of milestones. An example scenario was discussed where payment was received after the service was completed, indicating the time of supply is the receipt of payment.