Time And Place of Supply Provisions in GST India

A. Place of Supply Provisions:

A.1. Introduction:

As per the provisions of the Goods and Services Tax Act, 2017, there shall be levied a tax called CGST/ IGST on all intra State/ Inter State supplies at the rate and value as prescribed. In other words, whether a supply is Inter State or intra state is the deciding factor for applicability of tax i.e CGST & SGST/UTGST or IGST. Hence it is pertinent to identify any supply made in the normal course of business as either Inter State or Intra State Supply.

A.2. Understanding Inter State and Intra State Supplies:

Intra State Supplies: Where the location of Supplier and Place of Supply is with in the same state, it will regarded as Intra State Supply and accordingly the provisions under CGST and SGST/UTGST laws will be applicable.

Inter State Supplies: On the Other hand, when the location of Supplier and the place of Supply are either in:

a)  Two different States

b) Two different Union territories

c) a State and a Union territory 

then such supply will be regarded as Inter State Supply and accordingly the provisions under IGST laws will be applicable.

A.3. Understanding Place of Supply Provisions under GST: 

A.3.1 Place of Supply of Goods Provisions

Example: Mr. A registered in Delhi dealing in the trading of groundnuts and has agents in Haryan, Punjab & Rajasthan. Mr C, an agent of Mr. A in Punjab purchases goods from local vendor on behalf of A. Discuss the chargeability of supply made to Mr. C? 

A.3.2 Place of Supply of Service Provisions

Eg: Directors of ABC Ltd, registered in Chandigarh have workspace in Chandigarh and travels on business trips to Bombay on regular basis. They avail accommodation services in Bombay and the invoice for accommodation services is billed in the name of ABC Ltd. What should be chargeability of such transaction?

A.4. :Legal References:

As per Section 2(71) of the CGST Act, 2017:

“location of the supplier of services” means,—

(a) where a supply is made from a place of business for which the registration has been obtained, the location of such place of business;

(b) where a supply is made from a place other than the place of business for which registration has been obtained (a fixed establishment elsewhere), the location of such fixed establishment;

(c) where a supply is made from more than one establishment, whether the place of business or fixed establishment, the location of the establishment most directly concerned with the provisions of the supply; and

(d) in absence of such places, the location of the usual place of residence of the supplier;

As per Section 2(103) of the CGST Act, 2017:

“State” includes a Union territory with Legislature; namely Delhi and Pondicherry

B. Time of Supply Provisions:

B.1. Introduction:

In layman language, time of supply means, the time when the liability pay tax arises. In other words, this is the time when the liability to pay arrives or the time when the activity of supply terminates. As per the provisions of the GST Law, 2017, time of supply has been classified into three categories i.e Time of Supply of Goods and Time of Supply Services and Time of Supply when the rate of tax changes.

B.2. Time of Supply of Goods:

Time of supply of goods provision can be classified for understanding in following categories. 

B.3. Time of Supply of Services:

Time of Supply of Services can be classified for understanding into following categories: 

Case Study: Refer Following table for cases in regards Time of Supply Provisions:

B.4. Time of Supply provisions when change in rate of tax:

B.5. Legal References:

As per Section 12 of the CGST Act:

(1) The liability to pay tax on goods shall arise at the time of supply, as determined in accordance with the provisions of this section.

(2) The time of supply of goods shall be the earlier of the following dates, namely:—

(a) the date of issue of invoice by the supplier or the last date on which he is required, under sub-section (1) of section 31, to issue the invoice with respect to the supply; or

(b) the date on which the supplier receives the payment with respect to the supply:

Provided that where the supplier of taxable goods 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 in respect of such excess amount.

(3) In case of supplies in respect of which tax is paid or liable to be paid on reverse charge basis, the time of supply shall be the earliest of the following dates, namely:—

(a) the date of the receipt of goods; or

(b) the date of payment as entered in the books of account of the recipient or the date on which the payment is debited in his bank account, whichever is earlier; or

(c) the date immediately following thirty days from the date of issue of invoice or any other document, by whatever name called, in lieu thereof by the supplier:

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.

(4) In case of supply of vouchers by a supplier, the time of supply shall be—

(a) the date of issue of voucher, if the supply is identifiable at that point; or

(b) the date of redemption of voucher, in all other cases.

As per Section 13 of the CGST Act, 2017:

The liability to pay tax on services shall arise at the time of supply, as determined in accordance with the provisions of this section.

(2) The time of supply of services shall be the earliest of the following dates, namely:—

(a) the date of issue of invoice by the supplier, if the invoice is issued within the period prescribed under sub-section (2) of section 31 or the date of receipt of payment whichever is earlier; or

(b) the date of provision of service, if the invoice is not issued within the period prescribed under sub-section (2) of section 31 or the date of receipt of payment, whichever is earlier; or

(c) the date on which the recipient shows the receipt of services in his books of account, in a case where the provisions of clause (a) or clause (b) do not apply:

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.

(i) the supply shall be deemed to have been made to the extent it is covered by the invoice or, as the case may be, the payment;

(ii) “the date of receipt of payment” shall be the date on which the payment is entered in the books of account of the supplier or the date on which the payment is credited to his bank account, whichever is earlier.

(3) In case of supplies in respect of which tax is paid or liable to be paid on reverse charge basis, the time of supply shall be the earlier of the following dates, namely:––

(a) the date of payment as entered in the books of account of the recipient or the date on which the payment is debited in his bank account, whichever is earlier; or (b) the date immediately following sixty days from the date of issue of invoice or any other document, by whatever name called, in lieu thereof by the supplier:

Provided that where it is not possible to determine the time of supply under clause (a) or clause (b), the time of supply shall be the date of entry in the books of account of the recipient of supply:

Provided further that in case of supply by associated enterprises, where the supplier of service is located outside India, the time of supply shall be the date of entry in the books of account of the recipient of supply or the date of payment, whichever is earlier.

Meaning Of Service And Valuation Provisions Under GST

The objective of the following video is to give brief idea about the Meaning of service under GST. Further we have tried to give a gist of Valuation Provisions under GST (Section 15 read with valuation rules of the Goods and Services Act, 2017).

Key Takeaways of 11th GST Council Meet 2017 !

Understanding GST in 4 Steps: Comprehensive Guide – Part 1

Goods and Service Tax, for short GST, is a tax levied on supply of goods and/or services. For every tax introduced by the Government (Centre or State) there is a leviable point or in other words, an occurrence of an event which triggers the application of such Tax. For Instance, Sale of Goods is the leviable point for charging Sales Tax/ VAT, manufacture of Goods is the leviable point for charging Excise Duty or Provision of service is a leviable point for charging Service Tax.

As per Section 8(1) of the Model GST Law (Charging Section):

There shall be levied a tax called the central/state Goods and Services Tax on all the Intra-State/ Inter-State(S.5 of IGST Act) Supplies of goods and/or services on the value as determined and rate as notified.

Hence the term supply is a crucial term to judge the applicability of GST.

The objective is to make the law approachable to the readers and thus efforts are made to analyse it by answering few questions/ four steps as guide to levy of GST:

1. What is taxable event – Is the event a taxable Supply?
2. Who is liable to pay tax – Who is a taxable person under GST?
3. When to pay such tax and its form– When is the Point of Taxation and Place of Supply.
4. How much to pay tax – What is the Transaction Value and allowable input tax credit?

Let us understand the 1st Question or 1st Step to GST i.e how to identify the taxable even i.e a Supply under GST in India.

In the sea of global commerce where complex multiple transactions are happening on a daily basis, it is pertinent to understand what is Supply under GST. So we can also put this in one statement:

‘Every Supply is a transaction but Every transaction is not a Supply’

To grab hold of the term Supply, the meaning of Supply as per Sec 3 of the Model GST Law has been broken into 4 parts:

Part 1: When a Transaction becomes Supply: (General Rule)

• a) All forms of supply of goods and/ or services such as sale, transfer, barter, exchange, license, rental, lease or disposal

1. With consideration
2.  In the Course or furtherance of business

• b) Exception: Any Importation of Services

1. With consideration
2. Whether or not in the course or furtherance of business

Part 2: When a Transaction even without Consideration becomes Supply: (Schedule 1)

• Permanent transfer/disposal of Input tax credit availed business assets
• Supply between distinct persons(Persons with same PAN but in different states-will be covered separately in detail) or related persons
• Transactions between Principal and Agent
•  Importation of services:

1. By Taxable Person
2. From Related Person or his other foreign establishments
3. In the course or furtherance of business

Part 3: Treatment of Supply in Composite or Mixed Supply:

• a) Conditions for Composite Supply:

1. Two or more Supplies
2. In naturally bundled form of Supply

Rule: Principal Supply will be treated as Supply and taxed accordingly.

Case Study: Transportation Service from any port to factory premises includes loading and unloading services of cargo as well. This is a case of composite supply and the principal supply is transportation and not cargo handling service and hence the supply will be treated as supply of transportation service and taxed accordingly.

• b) Conditions for Mixed Supply:

1. Two or more Supplies
2. Combination of Individual goods or services
3. Single Price is charged for such combination

Rule: Supply of goods/services amongst the combination which attracts the highest rate will be charged.

Case Study: Gift packages or package consisting of chocolates, cookies, aerated drinks etc sold in combination of multiple goods with a common price for the package is a mixed supply and the goods with highest rate of tax amongst such combination will be charged on such mixed supply.

Part 4: Specific Exceptions: Transactions which are Supply as per general rule but are excluded specifically from the list:

• Any service by an employee to his employer
• Any service by a Court or Tribunal
• Services of funeral, burial or crematorium or mortuary including the transportation of the deceased
• Services by a foreign diplomatic mission located in India
• Functions of MP, MLA, Member of Panchayats, Member of Munipalities and Member of local authorities,
• Duties performed by any member, chairperson or director of post established by any Government and not deemed as an employee
• Services provided Government mentioned in Schedule IV

So this article was all about Supply (i.e 1st Question/ Step to GST). Once the taxable transaction is identified, the next step would be identifying taxable person i.e whether the person supplying such goods and/or services is a taxable person or not to ensure taxability of GST.

Disclaimer

The sole intention of this document is sharing knowledge on the subject and not solicitation of any sort. Further the information and content is the opinion of the author that may vary from others and hence will not form part of any litigation. 

Source of information : Model GST Law, as amended in November,16

A Guide to GST Migration- Procedure and Cases

Q. What is GST migration?

A. GST will be a common indirect tax law which would subsume majorly all indirect taxes may it be VAT, CST, Service Tax, Excise Duty, Entry Tax etc. Now in order to bring the law in force, the data collation for all the existing assesses from different tax departments to one common pool needs to be done and further assesses having multiple law registrations like excise and VAT or excise and Service Tax etc would also provide in their details against one GST registration no. Hence this migration is required and surely it is a first step towards the Largest Tax Reform since Independence.

Q. What is the need for migration into GST when the law has not come yet?

A. Legally, the migration process has no statutory obligation and the Model GST Law, as brought in by the GST Council mandates for auto migration but still the migration process is important in following ways:

• PAN and Contact details verification before hand
• Allotment of GST Number on the day GST is appointed, for issuing valid Tax Invoice under GST else one has to first apply for the provisional registration certificate since the data has not been updated with GSTN.

Q. What if Provisional GST ID is not yet issued or Invalid as issued by the Department?

A. There has been cases where GST Provisional ID is not received or the issued ID is invalid when trying to login. It may be the case when the GSTN has not issued the ID’s to the concerned Excise and taxation department. In this case intimation to the concerned ward in the excise and taxation/ Service tax department can be made and the fresh ID will be issued or the issue can also be mailed to the helpdesk at helpdesk@gst.gov.in or call at 0124-4688999.

Q. What if the mandatory fields are incorrect when logging in at www.gst.gov.in?

A. The data in the mandatory fields represents the data available with the concerned department against the assessee’s registration with the local dept and the same is shared with the GSTN. There can be cases where the data is not updated with the

department or there has been recent change in the constitution and the department has shared the old data with GSTN.

So to change the mandatory field, required updation of data with the department needs to be made first and post that a fresh Provisional GST ID will be issued within a month’s time with correct details as provided.

Q. Is there any time lime for migration into GST?

A. As updated by the GSTN, the time limit for migration has been raised and the migration window will remain open till further communicated.

Q. Who has to migrate into GST?

A. The golden rule to judge whether to migrate or not is – Whether a person is an existing assesse under any of the existing indirect tax law. If the answer is yes, then he has to get the migration done and if the answer is no, then nothing is required to be done till the date GST is appointed or further notified.

Q.If any assesse is supplying taxable and non-taxable goods and/ or services worth more than the maximum threshold limit of 20 lakh  but the supply of taxable goods component is below 20 lakh, Whether migration to be done?

A. If the person supplying such combination of goods is registered under existing law, then he has to get himself registered. Further, post appointment of GST also, registration would be required since as per the Model GST law, to ascertain the maximum exemption limit, Aggregate turnover is considered that would mean taxable, exempt and non-taxable supplies will be taken together and if the total exceeds the threshold then GST registration is mandatory. Hence the total turnover of taxable and non-taxable goods/ services will be considered for judging the applicability of GST in India.

Q. What if any assesse wants to shut down his business in near future. Migration should be done?

A. The Registration Certificate issued by the existing department has its validity unless until the same is surrendered. Now if nothing is done and no intimation is made to the department, GSTN will follow up and issue the Provisional Registration Certificate based on valid existing RC under existing law and would require compliance procedures under GST to be followed. Hence it is advised to migrate and surrender the RC under GST.

Q. What if a single person is proprietor in multiple business under common PAN. How many registration under GST?

A. Since the assesse is proprietor in multiple assesse, there can be following cases:

1. Single Proprietor, Multiple Business with in Same State – Single Proprietor, Multiple Business with in Same State – In this case, since the existing registrations are different for different business, hence both the businesses will be issued separate provisional ID’s and will migrate into GST separately. Our advise: If the businesses fall under same business vertical, both the businesses can be migrated into GST and post GST rolls in, the GST registration of one business can be surrendered and the business space can be declared as additional place of business of the first business. This would reduce the compliance formalities from 74 returns per year to 37 years per year. 
2. Single Proprietor, Multiple Business in different States – In this case, both the business will be considered as two distinct persons and  and separate migration procedures will be done for both the businesses

Q. What is Additional Place of Business under GST? 

A. An Additional place of business under GST would mean any additional business space with in the same state. . In other words, any branch office in another state would not form part of additional place of business under GST, because separate registration has to be obtained and hence separate migration process will be done for any existing registrations in different state. 

Q. Assesse post migration on the GSTN portal gets a “PAN mismatch” mail on the registered Email ID from the GSTN. What do to?

A. GSTN verifies the data provided in the application form with the data with the NSDL under PAN. Any mismatch of name, Father’s name, date of birth etc will trigger the mismatch report. In this case, visit “My Submission” tab after logging into GSTN with GST ID and password and edit the details as per PAN and submit the form.

Q. What is HSN Code and SAC in GST?

A. HSN Code (Harmonised System of Nomenclature) and SAC (Service Accounting Code) is a unique code given to each category of goods and services respectively to help identify the classification of supply and accordingly apply the GST rate as notified  by the GST Council i.e 0%, 5%, 12%, 18% or 28%. In India, HSN coding is currently used under Excise and Customs for classification of products and  under GST as well, government shall continue the concept of classification based on HSN. The detailed list of HSN Codes with description of goods is available on the mentioned link https://www.gst.gov.in/documents/HSN.pdf  

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