How is time of supply accounted under GST Tax Calculation

Posted on 25 April 2023 Category : GST Law

How is changes in rate of GST accounted for Tax assessment?

Example 1. The taxable service has been provided on 15^th January. The rate of changes in GST tax effected on 16^th January. Invoice for the said service has been issued on 17^th January. The payment against the said transaction has received on 18^th January. How is GST rate accounted?

In case the taxable service has been provided before the change in effective rate of tax where the invoice for the same has been issued and the payment is also received after the change in effective rate of tax, the time of supply shall be the date of receipt of payment or the date of issue of invoice, whichever is earlier.

Example 2. The taxable service has been provided on 15^th January. The rate of changes in GST tax effected on 16^th January. GST Tax invoice has been issued on 14^th January. Payment received on 17^th January. How is GST Tax calculated?

In case the taxable service has been provided before the change in effective rate of tax where the invoice has been issued prior to change in effective rate of tax but the payment is received after the change in effective rate of tax, the time of supply shall be the date of issue of invoice.

Example 3. The taxable service has been provided on 15^th January. The rate of changes in GST tax effected on 16^th January. Payment of the said supply has been received on 15^th January. But the GST tax invoice has been issued on 17^th January. How is the time of supply accounted to derive GST tax?

In case the taxable service has been provided before the change in effective rate of tax where the payment is received before the change in effective rate of tax, but the invoice for the same has been issued after the change in effective rate of tax, the time of supply shall be the date of receipt of payment.

Example 4. The taxable service has been provided on 15^th January. The rate of changes in GST tax effected on 14^th January. Payment against this supply received on 16^th January. GST Tax Invoice has been issued on 13^th January. How is time of supply accounted to calculate GST tax rate?

In case the taxable service has been provided after the change in effective rate of tax where the payment is received after the change in effective rate of tax but the invoice has been issued prior to the change in effective rate of tax, the time of supply shall be the date of receipt of payment.

Example 5. The taxable service has been provided on 15^th January. However, the rate of changes in GST tax effected on 14^th January. GST Tax invoice has been issued on 12^th January and the payment under the said supply has been received on 13^th January. How is GST Tax rate calculated?

In case the taxable service has been provided after the change in effective rate of tax where the invoice has been issued and the payment is received before the change in effective rate of tax, the time of supply shall be the date of receipt of payment or date of issue of invoice, whichever is earlier

Example 6. The taxable service has been provided on 15^th January. However, the rate of changes in GST tax effected on 14^th January. GST Tax Invoice has been issued on 15^th January. Payment under this transaction received on 13^th January. How is GST rate calculated against this supply?

In case the taxable service has been provided after the change in effective rate of tax where the invoice has been issued after the change in effective rate of tax but the payment is received before the change in effective rate of tax, the time of supply shall be the date of issue of invoice.

How does the date of receipt of payment of GST defined under GST Act?

The date of receipt of payment shall be the date on which the payment is entered in the books of accounts of the supplier or the date on which the payment is credited to his bank account, whichever is earlier: Provided that the date of receipt of payment shall be the date of credit in the bank account when such credit in the bank account is after four working days from the date of change in the effective rate of tax.

An extract of government information on changes in rate of GST tax is quoted below for further understanding:

“ Change in rate of tax in respect of supply of services (1) Notwithstanding anything contained in section 13, the time of supply, in cases where there is a change in the effective rate of tax in respect of services, shall be determined in the following manner, namely:- (a) in case the taxable service has been provided before the change in effective rate of tax – (i) where the invoice for the same has been issued and the payment is also received after the change in effective rate of tax, the time of supply shall be the date of receipt of payment or the date of issue of invoice, whichever is earlier; or (ii) where the invoice has been issued prior to change in effective rate of tax but the payment is received after the change in effective rate of tax, the time of supply shall be the date of issue of invoice; or (iii) where the payment is received before the change in effective rate of tax, but the invoice for the same has been issued after the change in effective rate of tax, the time of supply shall be the date of receipt of payment; (b) in case the taxable service has been provided after the change in effective rate of tax - (i) where the payment is received after the change in effective rate of tax but the invoice has been issued prior to the change in effective rate of tax, the time of supply shall be the date of receipt of payment; or (ii) where the invoice has been issued and the payment is received before the change in effective rate of tax, the time of supply shall be the date of receipt of payment or date of issue of invoice, whichever is earlier; or (iii) where the invoice has been issued after the change in effective rate of tax but the payment is received before the change in effective rate of tax, the time of supply shall be the date of issue of invoice. Explanation. - For the purpose of this section, “the date of receipt of payment” shall be the date on which the payment is entered in the books of accounts of the supplier or the date on which the payment is credited to his bank account, whichever is earlier: Provided that the date of receipt of payment shall be the date of credit in the bank account when such credit in the bank account is after four working days from the date of change in the effective rate of tax.”

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