Time of supply of services :
(i) General rule
The general principle for determining the time of supply of service is the time when the services performed (i.e. completed) which is the basic tax point for the services. Issue of the invoice and the payment of service are the actual tax point. Time of supply of services shall be the earliest of the above.
The Model GST Law provides that the time of supply of services shall be;
(a) the date of issue of invoice or the date of receipt of payment, whichever is earlier, if the invoice is issued within the prescribed period, or
(b) the date of completion of the provision of service or the date of receipt of payment, whichever is earlier, if the invoice is not issued within the prescribed period, or
(c) the date on which the recipient shows the receipt of services in his books of account, in a case where the provisions of clause (a) or (b) do not apply.
For the purposes of clauses (a) and (b) above , the supply shall be deemed to have been made to the extent it is covered by the invoice or, as the case may be, the payment.For the purpose of clause (a) and (b) above, “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.
(ii) Continuous supply of services
In case of continuous supply of services, the time of supply shall be –
(a) where the due date of payment is ascertainable from the contract, the date on which the payment is liable to be made by the recipient of service, whether or not any invoice has been issued or any payment has been received by the supplier of service;
(b) where the due date of payment is not ascertainable from the contract, each such time when the supplier of service receives the payment, or issues an invoice, whichever is earlier;
(c) where the payment is linked to the completion of an event, the time of completion of that event;
The Model GST Law empowers the Central or State government to notify specified supply of services as continuous supply of services.
(iii) Reverse charge
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 receipt of services, or
(b) the date on which the payment is made, or
(c) the date of receipt of invoice, or
(d) the date of debit in the books of accounts.
(iv) Residual provisions
In a case where the supply of services ceases under a contract before the completion of the supply, such services shall be deemed to have been provided at the time when the supply ceases. Where it is not possible to determine the time of supply of services under any of the above mentioned provisions, the time of supply shall be (a) in
a case where a periodical return has to be filed, the date on which such return is to be filedorin any other case, the date on which the CGST/SGST is paid.
V. Change in rate of tax (services)
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.
(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) wherethe 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.
VI. Imports and Exports
As imports of goods is not treated as domestic supply, the treatment for levy of GST on imports will be distinct from GST on domestic supplies. The time of supply in such cases will be the relevant date for levy of Customs duty. Date of filing of Bill of Entry /Declaration for clearance of goods for home consumption shall be the time of
supply in normal cases. In case of prior entry, the date of entry inwards or arrival of the aircraft under which the goods have been imported, shall be the time of supply.
The time of supply for export of goods/services shall be governed by the general provisions relating to the determination of time of supply of goods/services in India.