GST #Issue17 – Change in rate of tax in respect of supply of goods or services

By | January 10, 2017
(Last Updated On: January 10, 2017)

Change in rate of tax in respect of supply of goods or services

Provisions in Revised Model GST Law regarding Change in rate of tax in respect of supply of goods or services

Section 14 of Revised Model GST Law provides as follow :-

14. Change in rate of tax in respect of supply of goods or services

Goods or Service suppliedPayment  receivedInvoice IssuedTime of Supply 
Prior to Rate ChangeAfter Rate ChangeAfter Rate ChangeDate of receipt of payment or the date of issue of invoice, whichever is earlier
Prior to Rate ChangeAfter Rate ChangePrior to Rate ChangeDate of issue of invoice,
Prior to Rate ChangePrior to Rate ChangeAfter Rate ChangeDate of receipt of payment
After Rate ChangePrior to Rate ChangeAfter Rate ChangeDate of issue of invoice
After Rate ChangeAfter Rate ChangePrior to Rate ChangeDate of receipt of payment
After Rate ChangePrior to Rate ChangePrior to Rate ChangeDate of receipt of payment or the date of issue of invoice, whichever is earlier

Issue regarding Change in rate of tax in respect of supply of goods or services

The time of supply in cases of supply of Goods service has been provided before change in rate of tax
the time of supply is determined on the basis on date of payment or invoice. This contradicts with charging section 8 where levy is on supply. This is diametrically opposite to the law laid down by the Hon’ble Supreme Court in the case of Vazir Sultan Tobacco which says that Excise duty was on manufacture only only its collection was deferred at the time of removal of Goods.

Suggestions regarding Change in rate of tax in respect of supply of goods or services

If the supply of goods or services has been done before the change in the rate of Tax, then GST Tax should be collected at rate in force before the change in rates.

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GST #Issue13 why Reverse Charge under Revised GST Law needs Amendment

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GST #Issue16 : GST on Advance Payment for Goods and Services

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