Registration for Taxpayers who Pay Reverse Charge
All persons who are required to pay tax under reverse charge have to register for GST irrespective of the threshold. [Threshold: turnover in a financial year exceeding INR 20 lakhs (INR 10 lakhs for North eastern and hill states)] Time of supply for goods under reverse charge In case of reverse charge, the time of supply shall be the earliest of the following dates:
the date of receipt of goods
OR
the date of payment
OR
the date immediately after THIRTY days from the date of issue of invoice by the supplier (60 days for services) If it is not possible to determine the time of supply with the above rules then the time of supply will be the date of entry in the books of account of the recipient. When calculating the date of payment, the earlier of the following will be taken into account:
1. the date on which the recipient entered the payment in their books
OR
2. the date on which the payment is debited from his bank account
For example: Let’s say the date of receipt of goods is 15th May 2018, and the date of payment is 15th July 2018. The date of invoice generation is 1st June 2018, and the entry in the books of the receiver is dated 18th May 2018. The time of supply of goods in this case will be 15th May 2018. If for some reason the time of supply could not be determined, then it would be the 18th May 2018 i.e., the date of
entry in the books of the recipient. Time of supply for services under reverse charge In case of reverse charge, the time of supply shall be the earliest of the following dates:
the date of payment
OR
the date immediately after SIXTY days from the date of issue of invoice by the supplier (30 days for goods) If it is not possible to determine the time of supply under (a) or (b), the time of supply shall be the date of entry in the books of account of the receiver of service. For clause (a)- the date of payment shall be earlier of-
1. The date on which the recipient entered the payment in his books
OR
2. The date on which the payment is debited from his bank account
When supplier is located outside India In case of ‘associated enterprises’, where the supplier of service is located outside India, the time of supply shall be-
– the date of entry in the books of account of the receiver OR
– the date of payment, whichever is earlier
