Dear Sir, My Client is government approved Valuer. He has charged professional fees in his bill. But payment of bill received after 40 to 45 days late. Out of total bill 25 % bills amount are not recovered due to some technical mistake or other reason. Now My question is that on which amount my client has made payment on GST? Whether GST payment liabilities arise on cash base or Mercantile Base?
The point of taxation in GST is supply, therefore, the liability for payment of GST arise at the time of supply.
As your client is service provider, the time of supply in case of supply of services is earlier of following—
1) The date of issue of invoice by the supplier or the last date on which he is required to issue the invoice with respect to the supply;
2) The date on which the supplier receives the payment with respect to the supply (i.e., Advance Payment).
Thus, facility of paying GST on cash basis is not available in GST regime, every taxpayer is required to pay tax on basis of time of supply irrespective of the fact that, payment is received or not.