Meaning of date of receipt of payment :
In case of change in effective rate of GST, the earlier rate applies if payment is received prior to change of effective rate of GST. Hence, taxable person may make book entry even if actually payment was received later. To avoid such practice, following provision has been made.
For purpose of section 14 of CGST Act, “the date of receipt of payment” shall be 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 – explanation to section 14 of CGST Act.
However, 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 – proviso to section 14 of CGST Act.
This provision is made to avoid practice of showing early receipt of payment by cheque, though actually the cheque may be deposited in Bank and credited in account much later.