When to Report Supplies in GST Returns

The time of supply rule determines when you should report your supplies and account for GST in your GST return.

Time of Supply Rules

For most transactions, a supply is treated as taking place (and output tax will be accounted for) at the earlier of when:

  1. An invoice is issued; or
  2. Payment is received.

The above time of supply rule will also apply to digital services supplied by an overseas vendor registered under the overseas vendor registration regime.  

  TOS Example 1

In this instance, the time of supply based on the earlier of the two events, is when the invoice is issued (i.e. 1 Mar 2020). As such, the supply should be reported in the GST return covering the period of Mar 2020. 

Determining When an Invoice is Issued

The date of issuance of any type of invoice will trigger the time of supply for GST purposes. This includes a tax invoice as well as any document (e.g. debit note) that serves as a bill, for payment for supplies made by a GST-registered supplier.

In general, documents such as sales order, pro-forma invoice, statement of accounts and letter/statement of claims are not considered as invoices for GST purposes. These documents are often not billing for payments and would therefore not be treated as invoices based on normal commercial practices.

For details, please refer to the e-Tax Guide GST: Time of Supply Rules (1156KB).

Determining when Payment Is Received

The date when payment is received from your customers is one of the events that triggers the time of supply. Payments can be received through the various modes as follows:

  • Cash
    Payment is treated as received on the date you receive the cash from your customer.
  • AXS & SAM Machines/NETS Facility/Credit Card etc.
    Payment is treated as received on the date these establishments transfer the money to you.
  • Telegraphic Transfer
    Payment is treated as received on the date your bank receives the money.
  • Cheques
    Payment is treated as received on the date you present the cheque to the bank (i.e. the bank-in date). For a cheque that is dishonoured, payment is treated as received on the date you present the new cheque to the bank.

TOS Example2

The date when the cheque was banked in (4 Mar 2020) will be treated as the date of payment received. Therefore, the supply will be treated as taking place on 4 Mar 2020.

Supplying Service on a Continuous Basis

You are supplying a service on a continuous basis if the service:

  1. Stretches over a period of several months or years (e. g. maintenance services, construction services, rental); and
  2. You receive periodic payments.

The supply is treated as taking place at the earlier of when:

  1. Your customer pays you; or
  2. You issue an invoice.

Goods Sold on 'Approval' or 'Sale/Return' Terms

You may supply goods to your customers under an approval or sale/return terms. Under such terms, the sale does not take place until the customer approves the goods to confirm the sale.

The time of supply will be treated as taking place at the earliest of the following:

  1. When any payment in respect of the supply is received;
  2. When an invoice in respect of the supply is issued; or
  3. 12 months after the removal of goods.

The payment received must be to discharge an obligation to pay for the supply arising from the adoption of the sale.

Security Deposits

The mere receipt of payment will not be regarded as consideration received if it is held as security pending the adoption of the sale.

If such security deposit is collected upfront, payment is regarded as received only when the deposit is applied as all or part of the consideration for the supply, following the adoption of the sale.

Once there is a payment received or an invoice issued, GST has to be accounted for based on the full selling price of the goods.

Cooling Period

The above treatment for goods sold on "Approval" or "Sale/Return" terms must be distinguished from a sale where you provide a cooling period to your customer to return the goods.

For such sales, the general time of supply would still apply. If your customers returned the goods during the cooling period, you should issue a credit note to nullify the sale. Upon issuing the credit note, you can reduce the output tax previously accounted for in your GST return.

Imported Services subject to Reverse Charge

With effect from 1 January 2020, if you are a business that is not entitled to full input tax credit, you are required to perform reverse charge and account for GST on the value of services procured from overseas suppliers. 

A reverse charge transaction is treated as taking place (and output tax will be accounted for) at the earlier of when:

  1. An invoice is issued; or
  1. A payment is made.

TOS Example 3

In this instance, the time of supply based on the earlier of the two events, is at the point when payment is made (i.e. 15 Jul 2020). As such, the supply should be reported in the GST return covering the period of Jul 2020.

For more information on the time of supply rules for reverse charge transactions, please refer to our e-Tax Guide GST: Taxing imported services by way of reverse charge.

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