The time of supply is important because it determines the taxable period in which the output tax should be accounted for.
The rules vary depending whether it is a supply of goods or services.
The basic time of supply for goods is :
- If the goods are to be removed/delivered, at the time of removal of goods.
- If the goods are not delivered, at the time when the goods are made available to the customers.
- If the goods are on consignment, at the time when it becomes certain that the taxable supply has taken place or 12 months after the removal, whichever is the earlier.
The basic time of supply of services is the time when the services are performed. The service is considered as performed when the work is done or completed by the supplier.
Usually the basic tax point is not the actual tax point. If the tax invoice is issued within 21 days from the basic tax point, the time the invoice is issued is taken as the time of supply. This apply to both goods and services.
Where the tax invoice is issued or payment is received prior to the basic tax point, the date of such issue or receipt is taken as the time of supply.
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