GST: Supply, Charge of GST, Place of Supply and Time of Supply
Supply
Section 7 covers sale, transfer, barter, exchange, licence, rental, lease and disposal for consideration in the course of business, plus import of services for consideration whether or not in the course of business. Schedule I covers supplies without consideration, such as permanent transfer of business assets, supplies between related or distinct persons, and principal-agent supplies. Schedule III covers sale of land, actionable claims other than lottery, and services by an employee to the employer.
Charge and classification
- Section 9(1): intra-State supply attracts CGST plus SGST; inter-State supply attracts IGST.
- Composite supply is taxed at the rate of the principal supply; mixed supply at the highest rate among its components.
- Reverse charge under 9(3) and 9(4) shifts the liability to the recipient.
Place and time of supply
- Goods: Section 10, generally where the goods are delivered or made available; Section 11 for immovable property, where the property is located.
- Services: Section 12 with the registered recipient's location as the general rule; Section 13 is residual.
- Time of supply for goods: earlier of invoice date and payment date. For services: earlier of invoice date (or the due date under 31) and payment date.
Worked example
Goods move from Mumbai to Pune on 5 May, the invoice is dated 10 May and payment is booked on 20 May. This is an intra-State supply within Maharashtra, the place of supply is Pune, and the time of supply is 10 May.
Traps
- Using the billing address instead of the delivery address for goods.
- Taxing Schedule III items such as sale of land.
- Taking the invoice date when payment was received earlier.
- Applying the highest rate to a composite supply instead of the principal supply rate.