What is the TIME of SUPPLY when CHANGE in GST rates?

Often the GST rates might change in coming futures and there are lot of confusion about its accounting or the time of supply in case when such change happens.

Section 14 which talks about the "change in rates of tax in respect of SUPPLY OF GOODS/ SERVICES" and 

prescribed the TIME OF SUPPLY in such cases and it is also worth to be noted that the provisions as mentioned in Sec 12 deals with the TIME of SUPPLY of GOODS and Sec 13 deals with TIME of SUPPLY of SERVICES will not apply extent to this section in case of change in rates.

When goods/ services supplied  BEFORE change in rate of TAX 

		Scenario I		Scenario II		Scenario III
a) Invoice issued		After change in tax rate		Before change in tax rate		After change in tax rate
b) Payment received		After change in tax rate		After change in tax rate		Before change in tax rate
Time of supply		Earlier of (a) or (b)		Date of Invoice		Date of Payment

Notes - 

1) It is important to note that the instance where invoice & payment received before change in tax rates will be governed by sec 12& 13 as usual.

2) When goods/services are supplied before change in rates and EITHER payment or invoice is issued before such change in rates then changed rates will NOT apply,

3) If both invoice and payment received after changed rates then earlier will be applicable and changed rates will be applied,

When goods/ services supplied  AFTER change in rate of TAX 

		Scenario I		Scenario II		Scenario III
a) Invoice issued		Before change in tax rate		Before change in tax rate		After change in tax rate
b) Payment received		After change in tax rate		Before change in tax rate		Before change in tax rate
Time of supply		Date of Payment		Earlier of (a) or (b)		Date of Invoice

Notes - 

1) It is important to note that the instance where invoice & payment received after change in tax rates will be governed by sec 12& 13 as usual.

2) When goods/services are supplied after change in rates and Payment or Invoicing whatever  happened later in the changed rates will be the time of supply & hence changed rates will be applied even someone tried to escape or use any favorable measure and issue either invoice or receive payment will not get any benefit and need to pay tax liability based on new rates. Hence supply of goods/ services is important.

3) If both invoice and payment is issued before changed rates then changed rates will NOT be applied,

The above understanding is crucial in order to avoid any penalty or interests from the authorities and need to keep a clarity on any planning/ process improvement overall.

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