The correct answer is D. Earliest of any of above.
Liability to pay GST arises on the earliest of the following events:
- On raising of invoice
- At the time of supply of goods
- On receipt of payment
This means that the GST liability must be paid as soon as one of these events occurs. For example, if an invoice is raised on 1st January and the goods are supplied on 3rd January, then the GST liability must be paid on 1st January.
The reason for this is that the GST system is based on the principle of “self-assessment”. This means that businesses are responsible for calculating and paying their own GST. The government does not collect GST directly from consumers.
As a result, it is important for businesses to be aware of the rules around when GST liability arises. This will help them to ensure that they are paying the correct amount of GST and avoiding any penalties.
Here is a brief explanation of each option:
- Option A: On raising of invoice. This means that the GST liability arises when the invoice is raised, even if the goods have not yet been supplied or payment has not yet been received.
- Option B: At the time of supply of goods. This means that the GST liability arises when the goods are supplied, even if the invoice has not yet been raised or payment has not yet been received.
- Option C: On receipt of payment. This means that the GST liability arises when payment is received, even if the goods have not yet been supplied or the invoice has not yet been raised.
- Option D: Earliest of any of above. This means that the GST liability arises on the earliest of the events listed above.