The GST is a taxation system that is based on destination/consumption, where the tax is imposed on the supply of goods or services which are taxable under the GST regulations. Here, the type of supply for the goods or services includes several crucial things, such as if the goods or services supplied are taxable, the rate of GST charged, and much more. Here, you will be learning in a detailed explanation about Time, Place, and Value of Supply of Goods or Services in GST.

Generally, Goods and Services Tax (GST) is classified into three types, namely State Goods and Services Tax (SGST), Central Goods and Services Tax (CGST) and the third being Integrated Goods and Services Tax (IGST). While both SGST and CGST are taxes that are charged in the invoice for intra-state transactions, IGST, on the other hand, is charged in the invoice for inter-state transactions by registered taxpayers.

Significance of Time, Place, and Supply of goods Or services under the GST act

Under the Goods and Services Tax (GST) law, time on the supply of goods and services are significant for any business in contrast to taxation. Time is vital for point of tax that when the liability to pay tax on goods and services will occur. In the same way, valuation on what value the tax shall be levied by the government. For valuing any goods, what to incorporate and to not include is a subject of in-depth argument. All this has been incorporated in Sections 12, 13, 14 and 15 of the MGL. The main basis of valuation is transaction value, where the parties aren’t related. However, important is when parties are related, what value shall be applied and the way an equivalent shall be considered in determination useful of supply of products and services rule,

1. Time of Supply

The time of supply refers to the point in time when goods or services are assumed to be supplied to the purchaser. By knowing the time of supply of the goods or services, the seller can easily identify the due date for payment of taxes. The purchaser is required to pay SGST/CGST or IGST at the time of supply of the goods or services. The goods or services have a separate level by which their time of supply is known.

(i) Time of Supply of Goods Or Services In Gst

The liability to pay SGST/CGST takes place at the time of supply of goods only. Here, the earliest time of supply of goods is basically considered when the following criteria are met:

• When the goods are moved, if needed
• Goods are made available to the purchaser when goods are not moved
• At the time of issuance of the invoice
• At the time of receipt of payment
• When the recipient shows the receipt of goods in his/her books of accounts

When there is continuous supply of goods or services, the time of supply shall be:

• At the successive statement of account or payment with regard to the contract
• Date of issue of invoice or receipt of payment, whichever is earlier

The time of supply, in the case of reverse charge shall be earliest of the following:

• The date of receipt of goods or services
• The date on which payment is made
• The date of receipt of the invoice
• The date of transaction(s) debited in the books of accounts

In the event when goods are sent based on approval, then the time of supply shall be either at the time of approval or six months from the date of removable, whichever is the earliest.

In the event when it may not be possible to establish the time of supply as mentioned above, then:

• The date of periodical return must be filed
• The date on which SGST/CGST is paid

(ii) Time of Supply of good or Services in Gst

The liability to pay SGST/CGST takes place at the time of the supply of services only. Here, the earliest time of supply of services is basically considered when the following criteria are met:

• On the date of issue of invoice or receipt of payment, whichever is the earliest. This is in case of the issuance of the invoice at the scheduled time.
• On the date of completion of services or receipt of payment, whichever is the earliest. This is in the case when the is not raised at the scheduled time.
• The date that is shown by the recipient for the receipt of services on his/her books of accounts. This is in the case when the above-mentioned criteria do not apply.

In the event of continuous supply of services:

The due date of payment with regard to the contract, whether invoice is issued or not, or any payment has been received or not by the supplier of services.

In the event where the date of payment has not been stated in the contract, issue of invoice or the receipt of payment, whichever is the earliest, shall be the time of supply of services.

In the event where the payment is linked to the completion of some event and the time of completion of that particular event.

In the event where tax is payable on the supply of services under reverse charge, earliest being the following:

• The date of receipt of services
• The date on which payment is made
• The date of receipt of invoice
• The date when supply of services is debited in the books of accounts

In the event when the supply of services is laid off under any contract before the completion of services, then such services are deemed to be completed on the termination of the contract.

In the event when it may not be possible to make certain of the supply of services as stated above, then the time of supply shall be the following:

• The due date of filing the periodical return
• The date on which SGST/CGST is paid

(iii) Reverse Charge

In the event of reverse charge, the time of supply for service(s) received is in the earliest of:

• The date of payment
• 30 days from date of issue of invoice for goods (60 days for services)

2. Place of Supply Of Goods And Services In Gst

Understanding the place of supply of goods or services is crucial in order to determine the correct tax that is to be charged on the invoice.

(i) Supply of Goods

Generally, the place of supply of goods is one where the goods are to be delivered. Also, the place of supply of goods is that place where the ownership of goods changes.

But, if there is no movement of goods, then, the place of supply is considered to be the location of goods at the time of delivery to the receiver.

For instance, in the event of sales in a supermarket, the place of supply will be the supermarket itself. The place of supply, in the event where goods that are assembled and installed will be the location where the installation is completed.

For instance, let’s assume that a supplier located in Mumbai supplies machinery to the recipient who is in Rajasthan. Now, the machinery that is installed in the factory of the recipient is situated in Lucknow. Thus, in this case, the place of supply of machinery will be Lucknow.

(ii) Supply of Services

Basically, the place of supply of services is actually the location of the service recipient. So, in the event where the services are rendered to a dealer who is not registered under GST and that his/her location is not available, then the location of the service provider will be the place of the supply of service.

Special provisions have been made to determine the place of supply for the following services:

• Services related to immovable property
• Restaurant services
• Admission to events
• Transportation of goods and passengers
• Telecom services
• Banking, Financial and Insurance services

However, in the event of services that are related to immovable property, the location of the property is the place of supply of services.

3. Value of Supply of Goods or Services In GST

The value of supply of goods or services in GST generally implies the money which a seller may wish to collect from the goods and services that have been supplied to the recipient. Thus, the amount collected by the seller from the purchaser is what is called the value of the supply of goods or services.

However, where a group of persons is related and a fair value may not be charged, or that the transaction may take place as barter or an exchange system, the GST Act orders that the value on which GST is charged must therefore be its ‘transactional value’.

This transactional value is the value at which a group of persons, who are not related, may conduct dealings in the normal line of business. Also, it makes sure that GST is levied and collected in the right way, even though the total value fo supply of goods or services may not have been paid.