CHAPTER-4 TIME OF SUPPLY

INTRODUCTION

• GST is payable on supply of goods or services. A supply consists of elements that can be separated in time, like purchase order, agreement, dispatch (of goods), delivery (of goods) or provision or performance of service, entry in the records, payment, and entry of the payment in the records or deposit in the bank. In order to calculate and discharge the tax liability, it is important to know the date when the tax liability arises i.e., the date on which the liability to pay GST occurs. In GST Law, it is known as Time of Supply. “Time of supply” means the “Point in Time” when the goods/services shall be considered to be supplied i.e., the time at which the liability to pay GST would accrue. Besides this, the principle of ‘Time of Supply’ is also relevant for the purpose of calculation of turnover for registration and period of exemption. GST Law has provided separate provisions to determine the time of supply of goods and time of supply of services. Also, it provides separate provisions to determine the time of supply of goods/services in forward charge mechanism and reverse charge mechanism.
• Sections 12, 13 & 14 along with section 31 and 148 read with rules 47 of the CGST Act, 2017, deal with the provisions relating to time of supply and by virtue of section 20 of the IGST Act, 2017, these provisions are also applicable to inter-state supplies leviable to Integrated Goods and Service tax.

Section-12 Time of Supply of Goods

(1) The liability to pay tax on goods shall arise at the time of supply, as determined in accordance with the provisions of this section.

(2) The time of supply of goods shall be the earlier of the following dates, namely:-

• • the date of issue of invoice by the supplier or the last date on which he is required, under [***]^[1] section 31, to issue the invoice with respect to the supply; or
  • the date on which the supplier receives the payment with respect to the supply:
  • Provided that where the supplier of taxable goods receives an amount up to one thousand rupees in excess of the amount indicated in the tax invoice, the time of supply to the extent of such excess amount shall, at the option of the said supplier, be the date of issue of invoice in respect of such excess amount.

Explanation 1– For the purposes of clauses (a) and (b), “supply” shall be deemed to have been made to the extent it is covered by the invoice or, as the case may be, the payment.

Explanation 2– For the purposes of clause (b), “the date on which the supplier receives the payment” shall be the date on which the payment is entered in his books of account or the date on which the payment is credited to his bank account, whichever is earlier.

(3) In case of supplies in respect of which tax is paid or liable to be paid on reverse charge basis, the time of supply shall be the earliest of the following dates, namely:-

• • the date of the receipt of goods; or
  • the date of payment as entered in the books of account of the recipient or the date on which the payment is debited in his bank account, whichever is earlier; or
  • the date immediately following thirty days from the date of issue of invoice or any other document, by whatever name called, in lieu thereof by the supplier:
  • Provided that where it is not possible to determine the time of supply under clause (a) or clause (b) or clause (c), the time of supply shall be the date of entry in the books of account of the recipient of supply.

[***]^[2]

(5) Where it is not possible to determine the time of supply under the provisions of sub-section (2) or sub-section (3) or sub-section (4), the time of supply shall–

• • in a case where a periodical return has to be filed, be the date on which such return is to be filed; or
  • in any other case, be the date on which the tax is paid.

(6) The time of supply to the extent it relates to an addition in the value of supply by way of interest, late fee or penalty for delayed payment of any consideration shall be the date on which the supplier receives such addition in value.

References for Amendments:-

[1] Omitted words “sub-section (1) of” vide  The Central Goods and Services Tax (Amendment) Act, 2018 (No. 31 of 2018) brought into force w.e.f. 01.02.2019.
[2] Omitted sub-section (4) vide The Finance Act, 2025 (No. 7 of 2025) dated 29.03.2025 brought into force w.e.f. 01.10.2025 notified vide Notification No. 16/2025-Central Tax dated 17.09.2025. Prior to its omission the same reads as under
” (4) In case of supply of vouchers by a supplier, the time of supply shall be-
(a) the date of issue of voucher, if the supply is identifiable at that point; or
(b) the date of redemption of voucher, in all other cases.”

Section-13 Time of Supply of Services 

(1) The liability to pay tax on services shall arise at the time of supply, as determined in accordance with the provisions of this section.

(2) The time of supply of services shall be the earliest of the following dates, namely:—

• • the date of issue of invoice by the supplier, if the invoice is issued within the period prescribed under [***]^[1] section 31 or the date of receipt of payment, whichever is earlier; or
  • the date of provision of service, if the invoice is not issued within the period prescribed under [***]^[2] section 31 or the date of receipt of payment, whichever is earlier; or
  • the date on which the recipient shows the receipt of services in his books of account, in a case where the provisions of clause (a) or clause (b) do not apply:

Provided that where the supplier of taxable service receives an amount up to one thousand rupees in excess of the amount indicated in the tax invoice, the time of supply to the extent of such excess amount shall, at the option of the said supplier, be the date of issue of invoice relating to such excess amount.

Explanation.-For the purposes of clauses (a) and (b)-

• • the supply shall be deemed to have been made to the extent it is covered by the invoice or, as the case may be, the payment;
  • “the date of receipt of payment” shall be the date on which the payment is entered in the books of account of the supplier or the date on which the payment is credited to his bank account, whichever is earlier.

(3) In case of supplies in respect of which tax is paid or liable to be paid on reverse charge basis, the time of supply shall be the earlier of the following dates, namely:–

• • the date of payment as entered in the books of account of the recipient or the date on which the payment is debited in his bank account, whichever is earlier; or
  • the date immediately following sixty days from the date of issue of invoice or any other document, by whatever name called, in lieu thereof [by the supplier, in cases where invoice is required to be issued by the supplier; or]^[3]
  • the date of issue of invoice by the recipient, in cases where invoice is to be issued by the recipient:]^[4]

Provided that where it is not possible to determine the time of supply under clause (a) or clause (b) [or clause (c)]^[5], the time of supply shall be the date of entry in the books of account of the recipient of supply:

Provided further that in case of supply by associated enterprises, where the supplier of service is located outside India, the time of supply shall be the date of entry in the books of account of the recipient of supply or the date of payment, whichever is earlier.

[***]^[6]

(5) Where it is not possible to determine the time of supply under the provisions of sub-section (2) or sub-section (3) or sub-section (4), the time of supply shall–

• • in a case where a periodical return has to be filed, be the date on which such return is to be filed; or
  • in any other case, be the date on which the tax is paid.

(6) The time of supply to the extent it relates to an addition in the value of supply by way of interest, late fee or penalty for delayed payment of any consideration shall be the date on which the supplier receives such addition in value.

References for Amendments:-

[1] Omitted words “sub-section (2) of” vide The Central Goods and Services Tax (Amendment) Act, 2018 (No. 31 of 2018) brought into force w.e.f. 01.02.2019.
[2] Omitted words “sub-section (2) of” vide The Central Goods and Services Tax (Amendment) Act, 2018 (No. 31 of 2018) brought into force w.e.f. 01.02.2019.
[3] Substituted for words “by the supplier:” vide The Finance (No.2) Act, 2024 (No. 15 of 2024) dated 16.08.2024, to be bought in force w.e.f. 01.11.2024 vide Notification No. 17/2024-Central Tax dated 27.09.2024.
[4] Inserted vide The Finance (No.2) Act, 2024 (No. 15 of 2024) dated 16.08.2024, to be bought in force w.e.f. 01.11.2024 vide Notification No. 17/2024-Central Tax dated 27.09.2024.
[5] Inserted vide The Finance (No.2) Act, 2024 (No. 15 of 2024) dated 16.08.2024, to be bought in force w.e.f. 01.11.2024 vide Notification No. 17/2024-Central Tax dated 27.09.2024.
[6] Omitted vide The Finance Act, 2025 (No. 7 of 2025) dated 29.03.2025 brought into force w.e.f. 01.10.2025 notified vide Notification No. 16/2025-Central Tax dated 17.09.2025.
“(4) In case of supply of vouchers by a supplier, the time of supply shall be––
(a) the date of issue of voucher, if the supply is identifiable at that point; or
(b) the date of redemption of voucher, in all other cases.”

Section-14 Change in rate of tax in respect of supply of goods or services

Notwithstanding anything contained in section 12 or section 13, the time of supply, where there is a change in the rate of tax in respect of goods or services or both, shall be determined in the following manner, namely:-

(a) in case the goods or services or both have been supplied before the change in rate of tax,-

• • where the invoice for the same has been issued and the payment is also received after the change in rate of tax, the time of supply shall be the date of receipt of payment or the date of issue of invoice, whichever is earlier; or
  • where the invoice has been issued prior to the change in rate of tax but payment is received after the change in rate of tax, the time of supply shall be the date of issue of invoice; or
  • where the payment has been received before the change in rate of tax, but the invoice for the same is issued after the change in rate of tax, the time of supply shall be the date of receipt of payment;

(b) in case the goods or services or both have been supplied after the change in rate of tax,-

• • where the payment is received after the change in rate of tax but the invoice has been issued prior to the change in rate of tax, the time of supply shall be the date of receipt of payment; or
  • where the invoice has been issued and payment is received before the change in rate of tax, the time of supply shall be the date of receipt of payment or date of issue of invoice, whichever is earlier; or
  • where the invoice has been issued after the change in rate of tax but the payment is received before the change in rate of tax, the time of supply shall be the date of issue of invoice:

Provided that the date of receipt of payment shall be the date of credit in the bank account if such credit in the bank account is after four working days from the date of change in the rate of tax.

Explanation- For the purposes of this section, “the date of receipt of payment” shall be the date on which the payment is entered in the books of account of the supplier or the date on which the payment is credited to his bank account, whichever is earlier.