Time and Value of Supply

When a ‘taxable supply’ of goods and/or services has been effected, the ‘time’, ‘place’ and ‘value’ of such supply needs to be determined next, as their ascertainment will determine —

  • Liability (if any) to pay Central Tax/State Tax and/or Union Territory Tax and/or Integrated Tax (as the case may be);
  • Quantum of such tax;
  • Time when such liability is incurred (to be discharged by payment of such said tax); and
  • Person obligated to pay such tax etc.

> Read more on ‘Supply’

Section 2 of the Central Goods and Services Tax Act 2017 (CGST Act) lists the various definitions (subject to context) to various key words, terms and phrases, some of which for the purpose of ‘time and value of supply‘ have been provided below ––

Agent” means a person, including a factor, broker, commission agent, arhatia, del credere agent, an auctioneer or any other mercantile agent, by whatever name called, who carries on the business of supply or receipt of goods or services or both on behalf of another.

Associated enterprises” shall have the same meaning as assigned to it in section 92A of the Income Tax Act 1961.

Central tax” means the central goods and services tax levied under section 9.

Consideration” in relation to the supply of goods or services or both includes––

(a) any payment made or to be made, whether in money or otherwise, in respect of, in response to, or for the inducement of, the supply of goods or services or both, whether by the recipient or by any other person but shall not include any subsidy given by the Central Government or a State Government;
(b) the monetary value of any act or forbearance, in respect of, in response to, or for the inducement of, the supply of goods or services or
both, whether by the recipient or by any other person but shall not include any subsidy given by the Central Government or a State Government:

Provided that a deposit given in respect of the supply of goods or services or both shall not be considered as payment made for such supply
unless the supplier applies such deposit as consideration for the said supply.

Continuous supply of goods” means a supply of goods which is provided, or agreed to be provided, continuously or on recurrent basis, under a
contract, whether or not by means of a wire, cable, pipeline or other conduit, and for which the supplier invoices the recipient on a regular or periodic basis and includes supply of such goods as the Government may, subject to such conditions, as it may, by notification, specify.

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.

Goods” means every kind of movable property other than money and securities but includes actionable claim, growing crops, grass and things attached to or forming part of the land which are agreed to be severed before supply or under a contract of supply.

Non-taxable supply” means a supply of goods or services or both which is not leviable to tax under this Act or under the Integrated Goods and Services Tax Act.

Non-taxable territory” means the territory which is outside the taxable territory.

Other territory” includes territories other than those comprising in a State and those referred to in sub-clauses (a) to (e) of clause (114).

Outward supply” in relation to a taxable person, means supply of goods or services or both, whether by sale, transfer, barter, exchange, licence, rental, lease or disposal or any other mode, made or agreed to be made by such person in the course or furtherance of business.

Place of business” includes––

(a) a place from where the business is ordinarily carried on, and includes a warehouse, a godown or any other place where a taxable person stores his goods, supplies or receives goods or services or both; or
(b) a place where a taxable person maintains his books of account; or
(c) a place where a taxable person is engaged in business through an agent, by whatever name called.

Place of supply” means the place of supply as referred to in Chapter V of the Integrated Goods and Services Tax Act.

Principal” means a person on whose behalf an agent carries on the business of supply or receipt of goods or services or both.

Principal place of business” means the place of business specified as the principal place of business in the certificate of registration.

Proper officer” in relation to any function to be performed under this Act, means the Commissioner or the officer of the central tax who is assigned that function by the Commissioner in the Board.

Recipient” of supply of goods or services or both, means—
(a) where a consideration is payable for the supply of goods or services or both, the person who is liable to pay that consideration;
(b) where no consideration is payable for the supply of goods, the person to whom the goods are delivered or made available, or to whom possession or use of the goods is given or made available; and
(c) where no consideration is payable for the supply of a service, the person to whom the service is rendered, and any reference to a person to whom a supply is made shall be construed as a reference to the recipient of the supply and shall include an agent acting as such on behalf of the recipient in relation to the goods or services or both supplied.

Registered person” means a person who is registered under section 25 but does not include a person having a Unique Identity Number.

Removal’’ in relation to goods, means—
(a) despatch of the goods for delivery by the supplier thereof or by any other person acting on behalf of such supplier; or
(b) collection of the goods by the recipient thereof or by any other person acting on behalf of such recipient.

Services” means anything other than goods, money and securities but includes activities relating to the use of money or its conversion by cash or by any other mode, from one form, currency or denomination, to another form, currency or denomination for which a separate consideration is charged.

Supplier” in relation to any goods or services or both, shall mean the person supplying the said goods or services or both and shall include an agent acting as such on behalf of such supplier in relation to the goods or services or both supplied.

Taxable supply” means a supply of goods or services or both which is leviable to tax under this Act.

Union territory tax” means the Union territory goods and services tax levied under the Union Territory Goods and Services Tax Act.

Union Territory Goods and Services Tax Act” means the Union Territory Goods and Services Tax Act 2017.

Works contract” means a contract for building, construction, fabrication, completion, erection, installation, fitting out, improvement, modification, repair, maintenance, renovation, alteration or commissioning of any immovable property wherein transfer of property in goods (whether as goods or in some other form) is involved in the execution of such contract.

 


Get Professional Help – Understand, Plan and Setup for GST

(click the “MinusTax Professionals” red banner below and fill-up/submit the pop-up form)

Need Tax Help?


Chapter IV
of the Central Goods and Services Tax Act 2017 (CGST Act) contains the necessary provisions to determine the ‘time’ and ‘value’ of supply for the purposes of levy of Central Tax as well as Union Territory Tax and Integrated Tax under the UTGST Act and IGST Act respectively.

The liability to pay tax (CGST, UTGST and/or IGST, as the case may be) on ‘goods’ arises at the time of supply (as determined here under) in the following manner. The ‘time of supply of goods’ is the earlier of the following dates —

  • Date of issue of ‘invoice’ by supplier or ‘last date’ on which so required (under section 31(1) of the CGST Act) to issue the invoice with respect to the supply; or
  • Date of receipt of payment by the supplier with respect to the supply.

Where the supplier of taxable goods receives an amount up to Rs.1000 in excess of the amount indicated in the relevant tax invoice, the time of supply to the extent of such excess amount will (at the option of the said supplier) be the date of issue of invoice in respect of such excess amount.

Supply” for the above said purposes is deemed to have been made to the extent it is covered by the invoice or the payment (as the case may be).

Date on which the supplier receives the payment” is the date on which the payment is entered in the books of account or the date on which the payment is credited to his bank account, whichever is earlier.


Supply on ‘Reverse-Charge’ Basis

Supplies in respect of which tax is paid or liable to be paid on ‘reverse charge’ basis, the time of supply is the earliest of the following dates —

  • Date of the receipt of goods; or
  • 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
  • Date immediately following 30 days from the date of issue of invoice or any other document (by whatever name called) in lieu thereof by the supplier.

Where it is not possible to determine the time of supply under the above said manner, the time of supply will be the date of entry in the books of account of the recipient of supply.

 

Supply of Vouchers

Supply of vouchers by a supplier, the time of supply will be —

  • Date of issue of voucher (if the supply is identifiable at that point); or
  • Date of redemption of voucher (all other cases).


Remainder Basis

Where it is not possible to determine the time of supply under the above stated manner, the time of supply will be ––

  • Where a periodical return has to be filed, be the date on which such return is to be filed; or
  • In any other case, be the date on which the tax is paid.

 

Value-Added Supply (interest, late fee or penalty for delayed payment)

Time of supply to the extent it relates to an addition in the value of supply by way of interest, late fee or penalty for delayed payment of any consideration, will be the date on which the supplier receives such addition in value.


Get Professional Help – Understand, Plan and Setup for GST

(click the “MinusTax Professionals” red banner below and fill-up/submit the pop-up form)

Need Tax Help?

The liability to pay tax (CGST, UTGST and/or IGST, as the case may be) on ‘services’ arises at the time of supply (as determined here under) in the following manner. The ‘time of supply of services’ is the earliest of the following dates —

  • Date of issue of invoice by the supplier (if the invoice is issued within the period prescribed under section 31(1) of the CGST Act) or the date of receipt of payment, whichever is earlier; or
  • Date of provision of service (if the invoice is not issued within the period prescribed under section 31(2) of the CGST Act) or the date of receipt of payment, whichever is earlier; or
  • Date on which the recipient shows the receipt of services in his books of account (in a case where the above said provisions do not apply).

Supply is deemed 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” is the date on which the payment is entered in the books of account of the supplier or the date on which the payment is credited to his bank account, whichever is earlier.

Where the supplier of taxable service receives an amount up to Rs.1000 rupees in excess of the amount indicated in the tax invoice, the time of supply to the extent of such excess amount shall, at the option of the said supplier, be the date of issue of invoice relating to such excess amount.


Supply on ‘Reverse-Charge’ Basis

Supplies in respect of which tax is paid or liable to be paid on ‘reverse charge’ basis, the time of supply will be the earlier of the following dates ––

  • 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
  • Date immediately following 60 days from the date of issue of invoice or any other document, by whatever name called, in lieu thereof by the supplier.

Where it is not possible to determine the time of supply under the above said manner, time of supply will be the date of entry in the books of account of the recipient of supply.

Supply by ‘associated enterprises’, where the supplier of service is located outside India, the time of supply will be the date of entry in the books of account of the recipient of supply or the date of payment, whichever is earlier.


Supply of Vouchers

Supply of vouchers by a supplier, the time of supply will be ––

  • Date of issue of voucher (if the supply is identifiable at that point); or
  • Date of redemption of voucher (all other cases).

 

Remainder Basis

Where it is not possible to determine the time of supply in the above manner, the time of supply will be ––

  • Where a periodical return has to be filed, be the date on which such return is to be filed; or
  • In any other case, be the date on which the tax is paid.



Value-Added Supply
(interest, late fee or penalty for delayed payment)

The time of supply to the extent it relates to an addition in the value of supply by way of interest, late fee or penalty for delayed payment of any consideration will be the date on which the supplier receives such addition in value.


Get Professional Help – Understand, Plan and Setup for GST

(click the “MinusTax Professionals” red banner below and fill-up/submit the pop-up form)

Need Tax Help?

The time of supply where there is a change in the rate of tax in respect of goods and/or services, is to be determined in the following manner ––

Supply before the change in rate of tax

  • Where the invoice for the supply has been issued and payment for the same is also received after the change in rate of tax, the time of supply is the date of receipt of payment or the date of issue of invoice, whichever is earlier; or
  • Where the invoice has been issued prior to the change in rate of tax but payment is received after the change in rate of tax, the time of supply is the date of issue of invoice; or
  • Where the payment has been received before the change in rate of tax, but the invoice for the same is issued after the change in rate of tax, the time of supply is the date of receipt of payment.


Supply after the change in rate of tax

  • Where the payment is received after the change in rate of tax but the invoice has been issued prior to the change in rate of tax, the time of supply is the date of receipt of payment; or
  • Where the invoice has been issued and payment is received before the change in rate of tax, the time of supply is the date of receipt of payment or date of issue of invoice, whichever is earlier; or
  • Where the invoice has been issued after the change in rate of tax but the payment is received before the change in rate of tax, the time of supply shall be the date of issue of invoice (date of receipt of payment shall be the date of credit in the bank account if such credit in the bank account is after 4 working days from the date of change in the rate of tax).

Date of receipt of payment” for the above said purposes is the date on which the payment is entered in the books of account of the supplier or the date on which the payment is credited to his bank account, whichever is earlier.


Get Professional Help – Understand, Plan and Setup for GST

(click the “MinusTax Professionals” red banner below and fill-up/submit the pop-up form)

Need Tax Help?


Value of Taxable Supply

(section 15)

The ‘value^ of a supply of goods and/or services is the ‘transaction value’ (i.e. the price actually paid or payable for the said supply, where the supplier and the recipient of the supply are not related and the price is the sole consideration for the supply).

The value of supply includes –––

  • Any taxes, duties, cesses, fees and charges levied under any law for the time being in force (other than the CGST Act, the State Goods and Services Tax Act, the Union Territory Goods and Services Tax Act and the Goods and Services Tax (Compensation to States) Act), if charged separately by the supplier;
  • Any amount that the supplier is liable to pay in relation to such supply but which has been incurred by the recipient of the supply and not included in the price actually paid or payable for the goods or services or both;
  • Incidental expenses, including commission and packing, charged by the supplier to the recipient of a supply and any amount charged for anything done by the supplier in respect of the supply of goods or services or both at the time of, or before delivery of goods or supply of services;
  • Interest or late fee or penalty for delayed payment of any consideration for any supply; and
  • Subsidies directly linked to the price excluding subsidies provided by the Central Government and State Governments (amount of subsidy will included in the value of supply of the supplier who receives the subsidy).

^‘Value’ of specified supplies may be notified by the Government on the recommendations of the GST Council, to be determined in a prescribed manner.


Exclusions for ‘Discount’

The ‘value’ of the supply will not include any discount which is given––

  • Before or at the time of the supply if such discount has been duly recorded in the invoice issued in respect of such supply; and
  • After the supply has been effected, if —
    (a) Discount is established in terms of an agreement entered into at or before the time of such supply and specifically linked to relevant invoices; and
    (b) Input tax credit as is attributable to the discount on the basis of document issued by the supplier has been reversed by the recipient of the supply.


Valuation Rules

Where the value of the supply of goods and/or services cannot be determined in the manner provided above, the same will be determined in such manner as may be prescribed (see Valuation Rules).


Administrative Help

For administrative assistance and general queries, please feel free to contact via —
Telephone: +91 8800 38 1950
Email: contact@minustax.com

Alternatively, please contact for an appointment and visit our representational office in DLF Phase IV, Gurgaon (click for Google Map directions).

Latest Updates

Follow us @MinusTax

Need Tax Help?
Need Tax Help?