Change in Rate of Tax [ Section 14 of CGST Act ] - GST Ready Reckoner - GST

Change in Rate of Tax Change in Rate of Tax in respect of supply of goods or services Provisions of time of supply of goods or services are governed by section 12 and 13 of CGST Act 2017 respectively, however, in case of change in rate, provisions of time of supply will be governed by section 14 of CGST Act, 2017 . In case of change in rate of tax, determination of rate of tax depends upon three events namely- Date of supply of goods or services Date of invoice and Date of receipt of payment If any two case of the above event occur before change in rate, the time of supply is before the change in rate of tax. If any two case of the above event occur after change in rate, the time of supply is after the change in rate of tax. Becomes applicable to the supply However, the special procedure for payment of tax by suppliers of goods (other than composition dealers) notified by Government vide notification no. 66/2017-Central Tax dated 15.11.2017 under section 148 of the CGST Act 2017 , will continue to govern even in the above situation. In a nutshell, suppliers of goods other than composition dealers will have to pay tax at the time of issue of invoice only. The change in rate of tax of supply of goods or services, time of supply has to be determined in the following manner: - Supply is completed before the change in rate of tax Invoice issued before date of change in tax rate Payment received before date of change in tax rate Time of supply Applicable rate of tax No No earliest of the date of invoice or payment New rate of tax Yes No Date of issue of invoice. Old tax rate No Yes Date of receipt Old tax rate Supply is completed after the change in rate of tax Invoice issued before date of change in tax rate Payment received before date of change in tax rate Time of supply Applicable rate of tax Yes Yes earliest of the date of invoice or payment Old rate of tax Yes No Date of issue of invoice. New rate of tax No Yes Date of receipt New rate of tax Example: - Determine the time of supply in the following case assuming rate of GST change from 18% to 20% w.e.f. 1 Jun, Sr. No. Date of supply of services Date of issue of invoice Date of receipt of payment Time of supply Applicable rate 1 May 28 Jun 9 July 25 Jun 9 20% 2 May 28 July 25 May 28 18% 3 Jun 9 May 26 May 26 18% 4 Jun 10 May 28 Jun 25 Jun 25 20% 5 May 28 May 16 May 16 18% 6 Jun 9 May 28 Jun 9 20% Date of receipt of Payment in case of change in rate of tax Normally the date of receipt of payment is the date of credit in the bank account of the recipient of payment or the date on which the payment is entered into his books of account, whichever is earlier. Further, the date of credit in the bank account is relevant if such credit is after four working days from the date of change in rate of tax. Example : The rate of tax on hotel rooms under ₹ 1000 was exempt earlier and the same shall be chargeable with 12% rate of tax from 18th July 2022, the service has been supplied on 17th July 2022 and payment with respect to same has been received via cheque on the same date and the invoice will be issued once the amount gets credited into the bank account of the hotel. Now, If the cheque gets credited into the bank account on the hotel till 21st July 2022, the said service shall be exempt If the cheque gets credited into the bank account on the hotel after 21st July 2022, the said service shall be taxable at the rate of 12% (as per the new rate of tax)