| Question And Answer | |
|---|---|
| Subject: | Point of taxation under GST |
| Category: | GST |
| Querist: | CA. Prerna S. Bora |
| Answered by: | Advocate C.B.Thakar |
| Tags: | Franchise, GST, point of taxation |
| Date: | September 29, 2021 |
Assessee is garage owner for repairing motor cars and register dealer under GST , has executed an franchise agreement with the other person on 1.04.2021 and date of commencement of franchise period of 3 year is from 1.06.2021. Assessee received some amounts from the other person in the month of March 2021, which will be adjusted towards franchise fees which is going to be operative w.e.f .1.06.2021. Whether amount of GST is to be paid in the month of March 2021 or June 2021
The grant of franchise will amount to ‘service’ under GST as per clause (f) in para 5 of Schedule II.
In case of service the time of supply is to be decided as per Section 13. Section 13(2)(a) reads as under :
“13. Time of Supply of Services.—
(2) The time of supply of services shall be the earliest of the following dates, namely:—
(a) the date of issue of invoice by the supplier, if the invoice is issued within the period prescribed under section 31 or the date of receipt of payment, whichever is earlier; or”
Thus, in case of Service, if any receipt is received prior to actual rendition of service, it will be taxable on receipt basis. In your case, the tax is payable in March,2021. The tax can be paid in September,2021 return by which the recipient can also be eligible to claim ITC.