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Our Nation is on the brink of GST, a single unified indirect tax system. This is the largest taxation reform in the indirect taxation regime and it subsumes a host of indirect taxes. GST introduces the concept of seamless flow of input tax credit across the supply chain (from manufacture till it reaches the consumer) and across state borders. Secondly, supply being the taxable event under GST, the concept of manufacture, trade and provision of services become irrelevant.

Point of Taxation (POT) refers to the point in time when tax is required to be paid. This is a mechanism which is used to determine the point in time when the tax liability will arise.
Under the current indirect tax regime, the point of taxation is different for each of the tax type.
 

Scenario

Type of Tax

Point of Taxation

Manufacturing of Goods

Central Excise

An immovable property is an immovable object, an item of property that cannot be moved without destroying or altering it. The property is fixed to the earth, for example, a piece of land or a house.
In the current tax regime, taxable services provided in relation to an immovable property are subject to Service Tax.
Service Tax, being a Central levy, is applicable irrespective of whether the service is provided intrastate or to a different state.

In our previous blog post What is Time of Supply for Goods on Forward Charge we discussed time of supply for goods on Forward Charge. In this blog, we will discuss time of supply of goods on reverse charge.

In our previous blog post What is Time of Supply for Goods on Forward Charge we discussed time of supply for goods. In this blog, we will discuss the Time of Supply on Forward Charge for Services.
 

Working capital is the lifeline of a business to carry out day-to-day operations. Managing working capital efficiently is a problem that plagues both small and large businesses. Inability to manage working capital may have adverse effects, including premature closure of businesses.
GST, a comprehensive indirect tax system, is a few months away from rollout. Businesses need to understand the implications of GST on various day to day operations.

In our previous blog, we discussed Time of Supply for Services under the Forward Charge Mechanism. Under the reverse charge mechanism, the recipient or buyer of services has to pay tax to the credit of the government unlike forward charge, where the supplier has to pay tax to the government.
 

In our previous blogs, we have discussed about the taxes that will be levied on supply under GST.

• On intrastate supplies, the taxes levied are Central GST (CGST) and State GST (SGST).
• On interstate supplies, the tax levied is IGST.

Another component of GST is now being talked about – UTGST. UTGST stands for Union Territory Goods and Services Tax.
Let us understand UTGST, the circumstances in which it is levied, and the manner of its levy.

Taxation laws have laid down the taxes applicable on import and export of goods and services. In the current tax regime, laws of Customs duty, Excise, Service Tax and VAT lay down the tax treatment of imports and exports. In the GST regime, Excise, Service Tax and VAT will be subsumed into GST and customs duty will continue to be levied separately. Let us understand the tax implication on imports and exports under GST in comparison to the current regime.

Current Regime

We have discussed about the general rules for determining the place of supply of services in our earlier blog. Let us now understand how to determine the place of supply in case of certain specific services.

Type of Service

Type of recipient

Place of supply

Example

Restaurant and catering services

Not applicable

Location where the service is rendered