Time of Supply of Goods – Residual provision - GST Ready Reckoner - GST

Time of Supply of Goods Residual provision Time of Supply Section 12 of CGST Act 2017 provides for the determination of time of supply in the situations of Residual provision. Before starting the analysis of about time of supply of goods, we should read time limit of issue of invoice as per section 31 of CGST Act 2017 . Time limit for issuance of invoice for supply of goods under section 31 of CGST Act 2017 A registered person supplying taxable goods shall, before or at the time of, - Removal of goods for supply to the recipient, where the supply involves movement of goods ; or Delivery of goods or making available thereof to the recipient, in any other case (in other words movement of goods not involve ) , [section 31(1)] Example ABC placed order to supply of mobile phone to ZYX, who agrees to supply within 10 days from the date of order. It is a case of supply involving movement of goods. VPL a manufacturer asks hi supporting manufacturer Goodluck to develop a mould for PQR for separate consideration. The said mould will kept and used by ABC for manufacture of components for 5 year. In this case, there is no movement of mould. In case of continuous supply of goods , where successive statements of accounts or successive payments are involved - The invoice should be issued before or at the time of issuance of periodical statement or receipt of periodical payment [Section 31(4)]. In case of goods sent or taken on approval for sale or return , are removed before the supply takes place Invoice should be issued before or at the time of supply or 6 months from the date of removal, whichever is earlier [Section 31(7)]. We consider below how the time of supply is determined in each of these situations Time of supply of goods or services (Residual provisions) Section 12(5) of CGST Act 2017 Where it is not possible to determine the time of supply under the provisions of sub-section (2) or sub-section (3) or sub-section (4) of Section 12 of CGST Act 2017 ,t hen time of supply shall be: - Earliest of following dates In a case where a periodical return has to be filed, be the date on which such return is to be filed; or In any other case, be the date on which the tax is paid. Examples: - Example 1:- A supplier of goods has received an amount of ₹1,00,000/- against an invoice of ₹80,000/- on 01.04.2020. the supplier makes a supply against ₹ 20,000/- subsequently but no invoice was issued and no invoice records of adjustment of the said amount appear in books of the supplier. Only date of dispatch is known. Here, the receipt of excess payment is actually an advance which does not create time of supply in case of supply of goods. Since the supplier is registered the time of supply in this case shall be determined as per 12(5)(a), date on which such return is to be filed against such supply. Example 2:- Enforcement Directorate (ED) in a money laundering case unearthed a large volume of undisclosed goods. The company claimed the assets as income from supply of goods. After having received inputs from ED, GST department initiated and investigation to determined GST liabilities. The company agreed to pay GST during investigation. In This case, the date of invoice or the date of supply of goods or the date of receipt of payment are not known and company is also unregistered. In case the Time of supply shall be determined as per sec. 12(5)(b) i.e., date of payment of tax.