EXAMPLE-52

Shambhu Ltd in India imported business support services from XYZ Inc of Singapore on 12.07.2017. The Invoice for Singapore dollar 1,48,000 is raised by XYZ Inc on 12. 07.2017.

(a)                Shambhu Ltd makes payment on 18.08.2017.

(b)               If makes payment on 22.10.2017

Determine the Point of taxation (Time of supply).

Answer

In case Taxable services provided or agreed to be provided by any person who is located in a non-taxable territory and received by any person located in the taxable territory other than non-assessee online recipient (OIDAR) is under reverse charge and recipient person is liable to pay tax of such supply of service. [SERVICES UNDER REVERSE CHARGE AS APPROVED BY GST COUNCIL]. Hence In the above transaction Shambhu Ltd is liable to pay tax under reverse charge.

The Place of supply in this case is determined according to section 13 of IGST, according to this place of supply is the location of recipient of services.

Time of supply in case of reverse charge is determined according to Section 13(3) of CGST Act. According to this, time of supply is the date of payment or date immediately following sixty days from the date of issuance of invoice (whichever is earlier).

 In view of above provisions, time of supply of services will be as follows for above cases

(a)                In this case payment is made by Shambhu Ltd on 18.08.2017, which is made within 60 days of date of issuance of invoice i.e. 12.07.2017. Thus, the time of supply is 18.08.2017.

(b)               In this case payment Shambhu Ltd is made after 60 days from the date of invoice, thus Time of supply is 61^st day from issue of invoice i.e. 11.09.2017 is the time of supply of business support service.