Elaborate the time of supply under the Reverse Charge Mechanism.

Time of supply for goods

The earliest of the following dates shall be used as the time of supply for goods in a reverse charge scenario:

• The dates of the goods’ receipt and payment
• The day that comes after 30 days have passed since the supplier’s invoice release date

The date of entry in the recipient’s books of accounts shall serve as the time of supply if the time of supply cannot be ascertained.

*According to Notification No. 66/2017 – Central Tax, which was published on November 15, 2017, this point is no longer relevant.

Illustration:

• Dates of receipt of goods (15 May 2021)
• Invoice (1 June 2021)
• Entry into the receiver’s books (18 May 2021)

In this case, the service’s start date will be May 15, 2021.

Time of Supply for Services

The earliest of the following dates shall be used as the time of supply in the event of a reverse charge:

• Payment Date
• The day immediately following the 60th day from the supplier’s invoice release date

The date of entry in the recipient’s accounting records will serve as the time of supply if it is impossible to pinpoint it.

Illustration:

• Payment date 15th July 2021.
• Date that is immediately following the invoice’s 60-day mark (for example, if the invoice was issued on May 15, 2021, 60 days from that date would fall on July 14, 2021).
• 18 July 2021 is the date of entry into the receiver’s books.

In this instance, the service will be provided on July 14, 2021.