Continuous Supply of Goods – GST

Continuous supply of goods is a type of supply, provided under a contract for a period of more than three months, on a continuous or recurrent basis. Supplies may be provided by means of a wire, cable, pipeline, or other conduits (this is just an illustration on the scheme of things, supplies can be made through any means). The Government has the privilege to notify certain supplies to be continuous. GST invoices, in these cases, can be raised on a periodical basis. A few examples of “Continuous supply” can be a supply of bricks for construction, security service, the supply of ten-litre water cans on a weekly basis, annual maintenance contract, or telecom and internet services.

No Late Fee for GSTR-1 & GSTR-3B Return

The biggest relief extended to small business by the 31st GST Council is the waiver of late fee for filing GSTR-1 and GSTR-3B return. The GST Council has announced:

“Late fee shall be completely waived for all taxpayers in case FORM GSTR-1, FORM GSTR-3B &FORM GSTR-4 for the months/quarters July 2017 to September 2018, are furnished after 22.12.2018 but on or before 31.03.2019.”

Thus, filing of Form GSTR-1, GSTR-3B and GSTR-4 will not attract any late fee penalty until 31st March 2019.

GST Annual Return Due Date Extended

All entities having GST registration should file GST annual return in form GSTR-9. The due date for filing GST annual return usually occurs at 31st December of each year for the financial year and ends on 31st March of the same calendar year. As the Government of India (GoI) introduced GST as a fresh taxation wave in India, the Government decided to extend the due date for GST annual return filing to 30th June 2019. Originally, the due date for filing GST annual return extended up to 31st March 2019, however, it further extended to 30th June 2019 by the GST Council.

Time Limit for Issue of Invoice

The entity shall produce on a periodical basis. However, for transactions that involve the continuous supply of goods, the GST Act also specifies a time limit for issuing an invoice. Hence, the entity shall issue an invoice for a continuous supply of goods before the expiry of the time limit as specified below:

Mention of Due Date in the Contract

In some types of contract for continuous supply, like the supply of internet, electricity, etc., the due date for payment would be fixed in a contract. In such cases, the issuer shall issue the invoice on or before the due date of payment.

When Due Date is Not Mentioned in Contract

Upon finding no due date of payment in the contract, the entity shall issue the invoice before or at the time when the supplier of service receives payment.

Completion of an Event

Upon linking the payment to the completion of an event, the issuer shall provide the invoice on or before the date of completion of that event.

General Invoice Rules

Invoices, as per the general dictum, must be produced within a period of 30 days from the date of supply, and forty-five days in case of a bank, or a non-banking financial institution. This is also applicable here, except that it varies from transaction to transaction, as witnessed above. Whatever the differences, invoices are generally produced within the prescribed time limit.

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