Learn the concept of time of supply of services in GST

“Time of supply” means the “Point in Time” when the goods/services shall be considered to be supplied i.e., the time at which the liability to pay GST would accrue. Besides this, the principle of ‘Time of Supply’ is also relevant for the purpose of calculation of turnover for registration and period of exemption. GST Law has provided separate provisions to determine the time of supply of goods and time of supply of services.

Let us understand the said provision through the practical Case Scenario.

Case Scenario

Mr. A provides taxable services to Mr. B. Following is the timeline of various events occurred in relation to that. Calculate the time of supply of services in respect of each payment.

Date	Events	Amount (in Rs.)
15.5.2020	Mr. B booked a convention hall of Mr. A by making an advance payment	20,000/-
16.5.2020	Amount entered in the books of Mr. A	20,000/-
25.5.2020	Mr. A issued an invoice to Mr. B	1,00,000/-
30.6.2020	Mr. B made a payment to Mr. A	70,000/-
15.7.2020	Mr. B made a payment along with interest charged by Mr. A on late payment	11,000/-

Solution:

S. No.	Events	Amount(in Rs.)	Earliest of	Time of supply
1.	Mr. B booked a convention hall of Mr. A by making an advance payment	20,000/-	(i)         Date of payment (15.5.20) (ii)       Date of issuance of invoice (25.5.20) (iii)      Date of entry in books of Mr. A (16.5.20)	15.5.20
2.	Mr. B made a payment to Mr. A	70,000/-	(i)         Date of issuance of invoice (25.5.20) (ii)       Date of payment (30.6.20)	25.5.20
3.	Mr. B made a payment along with interest charged by Mr. A on late payment	10,000/-	(iii)      Date of issuance of invoice (25.5.20) (i)         Date of payment (15.7.20)	25.5.20
		1,000/-	Date on which such addition to amount is received (15.7.20)	15.7.20

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