Valuation primarily revolves around determination of value of supply of goods and/or services on which tax is to be levied. In general, the transaction value is taken as value of supply.
However, we need to know the “time of supply” to determine the exact date of supply as liability to pay CGST/SCGT shall arise at the time of supply.
Time of supply will be taken differently depending on the fact whether there is a change in rate of tax or not.
In cases whether there is no change in rate of tax:
Time of Supply of goods shall be the earliest of followings dates:
i) The date of issuing of invoice.
ii) The last day by which invoice should have been issued.
iii) The date on which he entered the payment in his books.
iv) The date on which the payment is credited to his bank account
Time of supply of goods under reverse charge:
Reverse charge means the liability to pay tax is by the recipient of goods instead of the supplier. In case of reverse charge, the time of supply shall be the earliest of the following dates:
a) The date of receipt of goods
b) The date on which the recipient entered the payment in his books
c) The date on which the payment is debited from his bank account
d) The date immediately after THIRTY days from the date of issue of invoice by the supplier.
Time of supply of services shall be the earliest of the following dates:
a) The Date of Issue of Invoice if the invoice is issued within the prescribed time
b) The Date of provision of service if the invocie is not issued within the prescribed time
c) The date on which the payment is entered in the books of account of the supplier
d) The date on which the payment is credited to the bank account of the supplier
If none of the above, the date on which the recipient shows the receipt of services in his books of account.
Time of supply of services under reverse charge:
1. If the supplier is an associated enterprise and is located outside India it shall be the earliest of the following dates:
a) The date of entry in the books of account of recipient or
b) The Date of payment
2. In any other case it shall be the earliest of the following dates:
a) The date on which the payment is entered in the books of account of recipient
b) The date on which the payment is debited in the bank account of recipient
c) The date immediately following sixty days from the date of issue of invoice by the supplier
In any other case the date of entry in the books of account of the recipient.
Time of supply for vouchers for goods and services:
In case of supply of vouchers the time of supply is-
(a) The date of issue of voucher, if the supply can be identified at that point OR
(b) The date of redemption of voucher, in all other cases;
Addition in value of supply by way of Interest, late fee and penalty for goods and services:
The time of supply will be the date on which such interest, late fee or penalty is received.
When time of supply cannot be determined in case of goods and services:
If it is not possible to determine the time of supply by any of the above provisions, then it will be the date on which the return is to be filed, where a periodical return is to be filed.
For any other case it shall be the date on which the tax is paid.
In cases whether there is a change in rate of tax:
For supplies of goods and services done before the change in rate of tax:
a) Where the payment has been received before but invoice raised after the change – Date of receipt of payment (Date of entry in the books or credit in the bank account whichever is earlier).
b) Where the invoice issued prior to the change but payment received after the change – Date of issue of invoice.
c) Invoice issued and payment received after the change in rate of tax – Date of issue of Invoice or Date of Receipt of Payment whichever is earlier
The date of receipt of payment shall be the date of credit in the bank account if such credit is after four working days from the date of change in tax rate.
For supplies of goods and services done after the change in rate of tax:
a) Where the invoice issued and payment received before the change – Date of receipt of payment or date of issue of invoice whichever is earlier
b) Where the invoice is issued after the change but payment is received before the change- Date of issue of invoice.
c) Where the payment is received after the change but the invoice has been issued prior to the change – Date of receipt of payment (Date of entry in the books or credit in the bank account whichever is earlier)
The date of receipt of payment shall be the date of credit in the bank account if such credit is after four working days from the date of change in tax rate.