Home > What is Time of Supply for services under Forward Charge?

What is Time of Supply for services under Forward Charge?

In our previous post, we explained how to determine Time of Supply for Goods under Forward Charge. In this post, we have attempted to explain Time of Supply for Services under Forward Charge.

Although the decision of determining supply time of service is quite similar to that of deciding the time of supplying of the products, the services are indescribable unlike the goods. Hence to cover-up the distance between goods and services, and to make things simpler, the restrictions to decide the time of supply for goods and services are quite identical.

The time of supply on services under forward charge shall be the earliest of the following dates:-

  1. Date of Invoice
  2. Due Date to Issue Invoice
  3. Date of Receipt of Payment (the earliest of the date on which the payment is accounted in the books of accounts, or the date on which the payment os credited to his bank account).

Scenario 1

Date of Invoice: 20th Sep, 2017

Date of Receipt of Payment:10th Oct 2017

Since the date of invoice is earlier than the date of receipt of payment, so the time of supply will be date of invoice i.e. 20th Sep 2017.

Scenario 2

Date of Invoice: 5th Dec, 2017

Date of Receipt of Payment: 25th Nov, 2017

Since the date of receipt of payment is made in advance, and it is earlier than the date of invoice, so the time of supply will the Date of Receipt i.e. 25th Nov 2017.

Scenario 3

Date of Invoice: 5th Dec, 2017

Date of Receipt of Payment – Date of Entry in Books: 20th Nov, 2017

Date of Receipt of Payment – Date of Payment credited to Bank: 25th Nov, 2017

The time of supply will be the earliest of date of invoice or receipt of payment. Furthermore, the date of receipt of payment will be the earliest of the date on which the payment is entered in the books of accounts or, the date on which the payment is credited to the bank account.In this scenario, the date on which the receipt of payment is entered in the books of account is earlier than the date on which payment is credited to the bank account. Hence, the time of supply will be the Date of Entry in Books i.e. 20th November, 2017.

Scenario 4

Date of Invoice: 5th Nov, 2017

Date of Receipt of Payment – Date of Entry in Books: 15th Oct, 2017

Date of Receipt of Payment – Date of Payment credited to Bank: 10th Oct, 2017

The time of supply will be the earliest of date of invoice or receipt of payment. Furthermore, the date of receipt of payment will be the earliest of the date on which the payment is entered in the books of accounts, or the date on which the payment is credited to the bank account.In this scenario, the date on which payment is credited to the bank account is earlier than the date on which payment is entered in the books of account. Hence, the time of supply will be the date on which payment is credited to the bank account i.e.10th Oct, 2017.

There are certain other cases wherein case of time of supply, there is no invoice available. In such cases, the supply time will be the last day of invoice issuing and receiving of payments. Please note that the last date to issue the invoice is going to be 30 days from the date of service of supply. For instance, if the date of service completion is 2ndOctober 2017, the date of payment received is 6th November, then the date of supply of services has to be 31st October, 2017. This is because the 30 days date of completion of services is earlier than that of the payment received.

Simplify your GST Return Filing & Invoicing with GreenGST

Leave a reply

*

Related Post

Smart and Secure GST Filing Software Online in India – GreenGST

GST India is a comprehensive tax on manufacturing, sale and consumption of goods and services at national level, under, which no distinction will be made between, goods and services for levying of tax. GST India has subsumed almost every indirect tax, levied on goods and services by the Central and State governments in India.

GST has a G2B portal for taxpayers, to access the GST System, seeking to file their GST returns. However that would not be the only way, for interacting with the GST India Services, as the taxpayer, pertaining to his preference of third party applications, for instance GreenGST, will be able to interact with the GST system, seamlessly, sans any hassle via desktop, mobile and other interfaces.

The Advent of GST has paved way for modern SAAS based software’s, to facilitate your tax filing management. Therefore, to handle the great number of invoices that will be uploaded and GST returns that will be filed, every single day, there arises a great need for reliable GST filing software that will chisel out your GST filing woes, all at once! This is where, innovative SAAS based GST Software, such as GreenGST, wade their way to decongest the scenario of GST filing in India.

GreenGST, a product by Moglix, is a one stop-solution for meeting all your GST compliance needs. We extend our expertise in commerce, manufacturing and supply chain to solve problems related to digitization of supply chain as well as making it GST Compliant. Green GST makes your GSTR filing seamless irrespective of whether you are the buyer or the seller.

GreenGST helps you in reporting, invoice creations, reconciliation and GST filing. Our system will not only keep you GST compliant but it also comes with a dashboard based on daily analytics. It will gently remind you five days prior to the deadlines, so that you can download the report on non-compliant vendors and be safe from the hassle of last minute rush.

GSTQuiz

Test your GST readiness with this fun and interactive checklist!