How to determine time of supply for GST payable under reverse charge in India

Posted on 25 April 2023 Category : GST

4 situations when GST payable under reverse charge in India

What is Reverse Charge under GST Law

As per GST Law, Reverse Charge under GST means the liability to pay tax by the person receiving goods and / or services instead of the person supplying the goods and / or services in respect of such categories of supplies as the Central or a State Government may, on the recommendation of the Council, by notification, specify; Section 2(34) “Council” means the Goods and Services Tax Council established under Article 279A of the Constitution.

How is time of supply determined under service in case of tax payable under reverse charge?

According to GST Law, the time of supply will be the earliest of the following dates:

a) date of receipt of services

b) date on which payment is made

c) date of receipt of invoice

d) date of debit in the books of accounts by supplier.

Let us discuss the determination of time of supply under reverse charge with a simple and easy understanding example:

A supplied a service to B on 11^th January. B received the said service on 14th January. However, B received invoice against the said supply on 12^th January and supplier debited the said amount on 13^th of January. Here in this example, what would be the date of tax payable under reverse charge as per GST Law in India? Since the time of supply will be earliest of date of receipt of services, date on which payment is made, date of receipt of invoice and date of debit in the books of accounts by supplier, the time of supply under this example is on 11^th January.

Let us explain with another example to determine GST time of supply of service under reverse charges:

A supplied a service to B on 11^th January. B received the said service on 12th January. However, B received invoice against the said supply on 10^th January and supplier debited the said amount on 11^th of January. Here in this example, what would be the date of tax payable under reverse charge as per GST Law in India? Since the time of supply will be earliest of date of receipt of services, date on which payment is made, date of receipt of invoice and date of debit in the books of accounts by supplier, the time of supply under this example is on 10^th January.

This post explains about the determination of time of supply under reverse charges as per GST Law of India. I hope the example provided above to illustrate on determination of time of supply of services under reverse charges as per GST Law satisfies you.

If you would like to add more information about determination of time of supply under reverse charges of GST Law in India, share below your thoughts:

Click here to know GST rate on Goods and Services

GST Exemption list of goods and services

Find HSN number or Service tariff code for GST

GST registration guidelines

Indian GST Laws

How to export your goods?

Centralized GST registration of services permitted in India?

Retired from business ownership. Fresh GST registration in India?

GST Registration for Job workers in India

GST registration mechanism in India

Pre-registration of credit card necessary for GST payment in India