Sec 2(33) – Continuous Supply of Services

You are here :Home>Bare Law>Sec 2(33) – Continuous Supply of Services
Sec 2(33) – Continuous Supply of Services 2017-04-14T02:55:44+00:00

GST India Forum – Goods and Services Tax (GST) in India Forums Bare Law Sec 2(33) – Continuous Supply of Services

Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts
  • AdminAdmin
    Keymaster
    Post count: 130
    Topics: 129
    Replies: 1
    Been thanked: 1 time
    #1144 |

    “continuous supply of services” means a supply of services which is provided, or agreed to be provided, continuously or on recurrent basis, under a contract, for a period exceeding three months with periodic payment obligations and includes supply of such services as the Government may, subject to such conditions, as it may, by notification, specify;

    Priya MadrechaPriya Madrecha
    Moderator
    Post count: 280
    Topics: 4
    Replies: 276
    Been thanked: 1 time

    It refers to supply of services continuously or on recurrent basis under a contract for a period exceeding 3 months, with periodic payment obligations.
    The determination of stage of completion of services is an abstract one, unless specifically defined by contract, unlike in the case of goods where the volume of goods supplied can be easily tracked/ identified. Hence, a contract for supply of service spanning over a definite period has been treated as a continuous supply, so that the tax dues are collected periodically.
    The law categorically provides for time limit to issue invoices as under:
    (a)    where due date of payment is ascertainable: On or before the due date of payment;
    (b)    where the due date of payment is not ascertainable: Before or at the time of receipt of payment;
    (c)    where the payment is linked to the completion of an event (milestones): On or before the date of completion of that event.
    The following aspects need to be noted:
    •    It should be a contract for supply on a recurrent basis and cannot be a one-time supply contract;
    •    The period of contract of supply should be more than 3 months – viz., services should be supplied on a recurring basis for at least 3 months;
    •    The contract should be a case of periodic billing and periodic payments – viz., the billing and receipts thereto should be on a periodic basis (say for e.g.: every fortnight; every Monday etc.) and not one-time. Further, the contract should specify this periodicity/ frequency of billing/ payment;
    •    The Government is empowered to notify certain supplies as continuous supply of goods.
    Examples of continuous supply of services:
    (a)    Annual maintenance contracts;
    (b)    Licensing of software or brand names;
    (c)    Renting of immovable property

Viewing 2 posts - 1 through 2 (of 2 total)

You must be logged in to reply to this topic.