When to Issue Invoice under GST? - Time of Supply

The issuance of a GST invoice is closely related to the concept of time of supply under GST. In this article, we look at the both the time to issue an invoice under GST and time of supply in detail

When should GST invoice be issued?

GST invoice must be issued for all supply with a taxable value of more than Rs.200. Also, persons registered under GST are mandatorily required to issue an invoice irrespective of taxable value, when it's demanded by a customer.

The time for issuing GST invoice differs based on the type of supply, i.e., goods or services.

For goods, a tax invoice must be issued before the goods are removed from the premises of the supplier for transport to the recipient. In some cases, however, a tax invoice can be issued at the time of delivery of goods or while making the goods available to the recipient. In such cases, a delivery challan can be issued by the supplier to generate GST eway bill and transport the goods to the recipient without a tax invoice.

For services, a tax invoice must be issued before or after providing the service, but no later than thirty days from the date of providing of service.

When should GST estimate be issued?

On issuing an invoice, the supplier becomes liable for the remittance of GST tax amount mentioned on the invoice. Hence, an invoice should be issued only if the supply has started or if payment has been received. If neither supply or payment has started, then it’s best to issue an estimate to the recipient with a breakup of the pricing, GST tax payable and GST rates applicable.

Know how to issue a GST estimate.

Should an invoice be issued for advance payment received?

GST receipt voucher can be issued in case of an advance payment is received for goods or services. If the services or goods are not provided and the amount is refunded, a GST refund voucher can be issued.

Even if a receipt voucher is issued, tax is payable on the advance received for supply of goods or services.

Time of Supply under GST

Time of supply under GST is the date on which the tax liability arises on the person registered under GST. Various provisions in GST law dealing with the procedure for determining the time of supply for different types of transactions.

Time of Supply for Goods

For goods, time of supply is the earliest of the following dates:

  • Date of issue of an invoice by the supplier. If an invoice is not issued, then the last date on which the supplier is required to issue an invoice.

  • Date on which the supplier received the payment.

For services, time of supply is the earliest of the following dates:

  • Date of issue of an invoice by the supplier. All service invoices must be issued within 30 days of provisioning of services.

  • Date of receipt of payment.

In case it is not possible to determine the time of supply based on the above-mentioned methods, then the time of supply would be the earlier of date of filing of GST return or date of payment of GST.

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