Point of taxation under GST is at the time of supply of goods or services or both. Liability to pay tax arises at the time of supply of goods or services or both.
It is very important to understand concept of time of supply to compute the liability of output tax.
Time of supply is the time at which goods or services are considered to be supplied. Under GST the tax is on supply of goods or services or both.
Time of supply is the main factor to decide tax liability. Liability to pay tax arises as soon as a supply is made.
Tax liability arises at the time of supply.
Tax liability on any supply of goods arises at the time of supply. Time of supply in case of goods should be determined as explained below.
Time of supply of goods should be earliest of:
Tax should be charged on invoice amount whether supply is actually made or not or partially made.
Date of receipt of payment will be the date on which receipt is accounted in books of accounts or date on which money is credited into bank account.
When you are liable to pay tax under reverse charge basis, the time of supply should be earliest of:
Provided that where it is not possible to determine the time of supply under clause (a) or clause (b) or clause (c), the time of supply shall be the date of entry in the books of account of the recipient of supply.
In case of supply of services, the time of supply will be earliest of:
Provided that where the supplier of taxable service receives an amount up to one thousand rupees in excess of the amount indicated in the tax invoice, the time of supply to the extent of such excess amount shall, at the option of the said supplier, be the date of issue of invoice relating to such excess amount.
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