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CS Professional · Goods and Services Tax (GST) and Corporate Tax Planning · Time of Supply

Ganga Logistics Ltd receives services on reverse charge from an unregistered supplier, who is required under the Act to issue invoice. The supplier's invoice is dated 1 June. Ganga pays on 10 September and enters the payment in its books on 10 September, with the bank debit also on 10 September. Under section 13(3) of the CGST Act, 2017 as given, what is the time of supply?

The time of supply is 1 August, the date immediately following sixty days from the 1 June invoice. Under the reverse charge rule for services it is the earlier of the payment date and that date, and 1 August falls before the 10 September payment.

  1. A1 June, the date of invoice
  2. B10 September, the date of payment
  3. CThe date immediately following sixty days from 1 June, that is 1 AugustCorrect
  4. DThe date of entry of the services in the recipient's books

Explanation

For reverse charge services, the time of supply is the earlier of the payment date (10 September) and the day following sixty days from the supplier's invoice. Sixty days from 1 June ends on 30 July (June has 30 days, so 29 days remain in June after 1 June, plus 31 in July gives 60 on 30 July). The following day is 31 July. Re-counting: 1 June plus 60 days is 31 July, so the next day is 1 August. That is earlier than 10 September, so 1 August applies.

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