Determination of time of supply of services can be bifurcated in following four categories:
• Time of supply of services under forward charge.
• Time of supply of services under reverse charge.
• Time of supply in case of vouchers.
• Residuary clause
1. Time of supply of services under forward charge : The time of supply of services shall be the earliest of the following:
(a) Date of issue of invoice by the supplier if it is issued within prescribe period & invoice has to be issued as follows:
Timing to issue invoice for supply of Services
Before or after the provision of service but within a period prescribed
• 30 days in all cases except for banking and financial institution from the date of supply of services.
• 45 days in case of banking and financial institution from the date of supply of services
In case of continuous supply of services tax invoice has to be issued as follows:
• due date of payment can be identified from the contract
The invoice will be issued before or after the payment is to be made by the recipient but within 30/45 days of due date of payment. Invoice will be issued, whether or not any payment has been received by the supplier. For example, telecom service provider sends telephone bill every month. This is mentioned in the contract with the telecom company.
• due date of payment is cannot be identified from the contract
The invoice shall be issued before or after each time when the supplier of service receives the payment but within 30/45 days of receipt of payment.
• payment is linked to the completion of an event
The invoice shall be issued before or after the time of completion of that event but within 30/45 days of completion of event.
• supply of services ceases under a contract before the completion of the supply
The invoice shall be issued at the time when the supply ceases and such invoice shall be issued to the extent of the service provided before stopping.
Continuous supply of service means
• supply of services which is provided or will be provided
• continuously or on recurrent basis
• under a contract
• for a period exceeding three months
• with periodic payment obligation
(b) The date of provision of service if the invoice is not issued within prescribe period.
(c) Date on which the supplier receives the payment with respect to the supply of services.
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.
The date on which the supplier receives the payment shall be the date on which the payment is entered in his books of account or the date on which the payment is credited to his bank account, whichever is earlier.
In case an amount up to one thousand rupees is received in excess of amount indicated in tax invoice, supplier will have the choice of taking time of supply as date of invoice issued for the excess amount or advance received.
2. Time of Supply of Services under Reverse charge
a. other than associated enterprise
In case of supplies in respect of which tax is payable on reverse charge basis, the time of supply shall be the earliest of the following dates:
(a) the date on which the payment is made, it is the date on which the payment is entered in the books of the recipient of goods or the date on which payment is debited in bank account of recipient of goods
(b) the date immediately following sixty days from the date of issue of invoice by the supplier;
Time of supply shall be entry in the books of recipient of services in case time of supply cannot be determined under clauses (a), (b) supra.
b. associated enterprise
In case of supplies to associated enterprise in respect of which tax is payable on reverse charge basis, the time of supply shall be the earliest of the following dates:
(a) the date of entry in the books of account of the recipient
(b) the date of payment
3. Time of Supply of vouchers for Services
In case of supply of vouchers, by whatever name called, by a supplier, the time of supply for goods and services shall be:
(a) Date of issue of voucher, if the supply is identifiable at that point; or
(b) Date of redemption of voucher, in all other cases.
4. Time of Supply of Services : Residual provision
In case it is not possible to determine the time of supply as above, the time of supply shall—
(a) in a case where a periodical return has to be filed, the date on which such return is to be filed and
(b) in any other case, the date on which the CGST/SGST/IGST/UTGST is paid.