The GST is a system for taxing consumption where the supply of goods or services which are taxable under the terms of the GST is subject to taxation. The mode of procurement for products or services involves many main variables, such as whether the goods or services given are taxable, the GST rate paid, and much more. You can read about the time, location, and value of the supply of GST products or services in a detailed overview here.
The State Goods and Services Tax (SGST), the Central Goods and Services Tax (CGST), and the Integrated Goods and Services Tax (IGST) are commonly known as three types of GST. Although SGST and CGST are both taxes paid on the invoice for intra-state transactions, IGST, on the other hand, is charged on the invoice for inter-state transactions by registered taxpayers.
A GST supply/transaction’s time, place, and value assist taxpayers in determining the tax rate to be paid. It is important for a taxpayer to know the applicable CGST, SGST, and IGST rates when preparing a GST-compliant invoice. Using these invoices, a taxpayer will be able to file his GST returns correctly. The Goods and Services Tax (GST) has laid down certain laws and provisions concerning the determination of the time, place, and value of supply. In this post, let’s understand those rules and provisions in-depth and Time, Place, and Value of Supply Under GST(Goods Or Services Tax)
Supply time under GST
Time of supply refers to the duration in which goods and services are deemed to be supplied or sold. The arrival time allows a vendor to settle his GST debt on the due date. At the time of sale, the vendor must pay CGST / SGST and IGST. For products and services, the rules for deciding the time of delivery differ. The SGST / CGST payment duty shall take effect only at the time of delivery of the goods. Here, when the following conditions are met, the earliest date for the delivery of the products is essentially taken into account:
- If required, when the goods are transported,
- When goods are not transferred, goods are made available to the buyer.
- At the time that the invoice was published,
- At the time of payment receipt
- When the receiver demonstrates in his / her account books the receipt of goods
In the event of continuous delivery of goods or services, the time of supply shall be as follows:
- At the successive account or payment declaration with regard to the contract
- The date on which the invoice was released or payment received, whichever is earlier
In the case of a reverse charge, the delivery time must be the earliest of the following:
- The date on which goods or services are obtained
- The date on which the payment takes place
- The date of the invoice receipt
- The date of the debited transaction(s) in the books of accounts
Place of delivery under GST
In order to recognize the function of providing goods and services, it is important for the taxpayer to pay the required tax payable on the invoice. This determines whether intrastate or interstate is a delivery. Where goods are dispatched on the basis of approval, the date of delivery shall be either at the time of approval or six months from the date of disposal, whichever is the earliest.
If, as mentioned above, it may not be possible to decide the time of delivery, then:
- It is important to file the date of the periodic return
- The date on which payment is made to SGST / CGST
Generally speaking, the place where the items are distributed is one where the goods are to be delivered. The area where products are sold is also the location where the ownership of product changes.
However, if there is no movement of goods, then at the time of shipping to the recipient, the place of delivery is known to be the location of the goods. For instance, in the event of sales in a shop, the place of supply will be the store itself. The place of supply is the location where the installation is carried out in the case of products that are manufactured and assembled.
For starters, let’s assume that a supplier located in Mumbai supplies the receiver in Rajasthan with machinery. Now, the machinery
that is mounted in the recipient’s factory is located in Lucknow. Thus, in this situation, Lucknow would be the place of supply for machinery.
Quality of the distribution of goods or services protected by GST
In order to be able to recognize the purpose of delivering goods and services, the taxpayer must pay the necessary tax to be paid on the invoice. If the distribution is intrastate or is determined by the interstate. Where goods are dispatched on the basis of approval, either at the time of approval or six months from the date of disposal, whichever is the earliest, shall be the time of delivery.