Point of taxation means the point in time when goods have been deemed to be supplied or services have been deemed to be provided. The point of taxation enables us to determine the rate of tax, value, and due dates for payment of taxes.
Under GST the point of taxation , ie., the liability to pay CGST / SGST, will arise at the time of supply as determined for goods and services. There are separate provisions for time of supply for goods and time of supply for services. To read about time of supply of services please click here.
If the supplier receives an amount up to Rs. 1000 in excess of the invoice amount, the time of supply for the extra amount shall be the date of issue of invoice (at the option of the supplier).
For (a) and (b)- The supply shall be assumed to have been made to the extent it is covered by the invoice or the payment (as the case may be).
(b) The date on which the CGST/SGST is paid, in any other case.
In GST regime, the tax collection event will be earliest of the dates as given above. The various events like issuing invoice/making payment in case of supply of goods /services or completion of event-in case of supply of service triggering the tax levy, confirms that the Government wants to ensure tax is collected at the earliest point of time.
There are multiple parameters in determining ‘time’ of supply. Thus, businesses will face a challenge in maintaining and reconciling between revenue as per financials and as per GST.