In the Goods and Services Tax (GST) regime, the “time of supply” refers to the point in time when a supply of goods or services is considered to have taken place for the purpose of charging and paying GST. This is a critical aspect of the GST system as it determines when the GST liability arises on a supply of goods or services. The time of supply is determined based on the provisions specified in the GST laws and regulations.
The time of supply is generally determined based on the following factors:
- Issuance of invoice: If an invoice has been issued for a supply of goods or services, the time of supply is the date on which the invoice is issued.
- Payment of consideration: If an invoice has not been issued, the time of supply is the earlier of the date on which the consideration is received or the date on which it is due.
- Delivery of goods or services: If the supply involves the delivery of goods, the time of supply is the date on which the goods are handed over to the recipient. In case of services, the time of supply is the date on which the services are deemed to have been performed.
- Completion of event: In case of supplies related to an event such as a concert, exhibition, or similar events, the time of supply is the date on which the event is completed.
It is important to note that the time of supply is a crucial factor in determining the applicable GST rate, the due date for payment of GST, and the time limit for claiming input tax credit.