Supply of Service - Under Indian GST

Under

GST, the place of supply includes all forms of supply of goods and/or services. The categories include such as sale, transfer, barter, exchange or license. In addition, it also includes rental, lease or disposal made or agreed by a person in the course or furtherance of business. In this article, we look at the applicability of GST on the supply of service.

Supply of Service

The liability to pay Central GST or State

GST on services would arise at the time of supply. As per GST regulations, the time of supply of services shall be:

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;
Completion of the provision of service or the date of receipt of payment. The date shall relate to the earlier processed date and applies if the supplier yet to receive the invoice by the prescribed period.
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.

The invoice or the payment covers the payment for the supply of goods under GST. Further, the date of receipt of payment shall relate to the date. The date shall relate with the payment entered in the books of accounts of the supplier. Similarly, it can also relate to the date on which the payment is credited to the bank account.

Continuous Supply of Service

In case of continuous supply of services, the time of supply shall be:

The recipient of the service shall hold responsibility for the payments if the payment crosses the due date during ascertainable contracts. It applies if the supplier issued with the invoice or payment or not.
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;
Where the payment links to the completion of an event. Further, it shall also include the time of completion of that event.
The following mentions the earliest of the following dates for tax paid or liable for reverse charge. It applies during the time of supply:
- The date of receipt of services, or
- Date on which the payment is made, or
- Receipt of the invoice date or
- The date of debit in the books of accounts.

If it is not possible to determine the time of supply of services, then the time of supply would be when a periodical GST return has to be filed or the date on which the Central GST or State GST is paid.

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Frequently Asked Questions

Common questions about Supply of Service under Indian GST Compliance.

Under GST, the time of supply of services shall be the earlier of the following: 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 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.

In case of continuous supply of services, the time of supply shall be: the due date of payment, if the payment is linked to an ascertainable period; or the date of receipt of payment or the date of issue of invoice, whichever is earlier, if the payment is not linked to an ascertainable period; or the date of completion of the event, if the payment is linked to the completion of an event.

For services subject to reverse charge mechanism under GST, the time of supply shall be the earliest of the following dates: the date of receipt of services, the date of payment for the services, the date of receipt of invoice for the services, or the date of debit in the books of accounts.

If it is not possible to determine the time of supply of services, the time of supply shall be the date on which a periodical GST return has to be filed or the date on which the Central GST or State GST is paid, whichever is earlier.

Yes, the provisions for determining the time of supply under GST differ for goods and services. The article specifically covers the time of supply for services, whereas different rules may apply for determining the time of supply for goods.

The time of supply is crucial under GST as it determines the point at which the liability to pay GST arises for the supplier of services. It also impacts the time period for claiming input tax credit and filing GST returns.

The article does not mention any specific exceptions or special provisions for determining the time of supply for certain types of services. However, it is possible that the GST regulations may provide additional rules or exceptions for specific categories of services.

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 the bank account of the supplier, whichever is earlier.

If the invoice covers the payment for the supply of both goods and services under GST, the date of receipt of payment shall be determined with respect to the goods or services, depending on which one is supplied first.

The article does not specifically differentiate between the time of supply provisions for intra-state and inter-state supply of services under GST. It is likely that the same provisions apply for determining the time of supply, irrespective of whether the supply is intra-state or inter-state.