Chapter 6 – Time of Supply
Time of Supply Where Tax is Payable Under Forward Charge
Time of supply of goods [Section 12(2)]
Earliest of the following:
1. Date of issue of invoice by the supplier
or the last date on which he is required
under section 31, to issue the invoice
with respect to the supply
2. Date on which the supplier receives the
payment (entering the payment in
books of account or crediting of
payment in bank account, whichever is
earlier) with respect to the supply
No GST at the time of receipt of advance for
supply of goods: In case of supply of goods by a
registered person under forward charge
(excluding composition supplier), GST is to be
paid on the outward supply of goods on the date
of issue of invoice or the last date on which
invoice ought to have been issued in terms of
section 31 [Notification No. 66/2017 CT dated
15.11.2017].
Time Limit for Raising Invoices
Supply of goods [Section 31(1)]
1. Normal Cases: Before or at the time
of:
a. removal of goods for
supply to the recipient,
where the supply involves
movement of goods, or
b. delivery of goods or making
available thereof to the
recipient, in any other case.
2. Continuous Supply of Goods: In
case of continuous supply of goods,
where successive statements of
accounts or successive payments
are involved, the invoice shall be
issued before or at the time each
such statement is issued, or, as the
case may be, each such payment
received.
Time of supply of services [Section 13(2)]
1. Invoice issued within the time period
prescribed under section 31
Earliest of the following:
a. Date of issue of invoice by the
supplier
b. Date of receipt of payment
(entering the payment in books
of account or crediting of
payment in bank account,
whichever is earlier)
2. Invoice not issued within the time period
prescribed under section 31
Earliest of the following:
a. Date of provision of service
b. Date of receipt of payment
(entering the payment in books
of account or crediting of
payment in bank account,
whichever is earlier)
3. When the above events are
unascertainable: Date on which the
recipient shows the receipt of services in
his books of account
Supply of services [Section 31(2)]
1. Normal Cases: Before or after the provision of
service but within 30 days [45 days in case of
insurance companies/banking and financial
institutions including NBFCs] from the date of
supply of services
2. Continuous Supply of Services:
(1) Where the due The invoice shall
date of payment be issued on or
is ascertainable before the due
from the contract date of payment
(2) Where the due The invoice shall
date of payment be issued before
is not or at the time
ascertainable when the
from the contract supplier of
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 service receives
the payment
(3) Where the The invoice shall
payment is linked be issued on or
to the before the date
completion of an of completion of
event that event.
3. Goods Sent on Sale or Approval
Basis: Earlier of the following:
a. Before or at the time of
supply (date on which the
recipient accepted), or
b. 6 months from the date of
removal

Time of Supply When Tax is Payable Under Reverse Charge

Time of supply of goods [Section 12(3)]
Earliest of the following:
1. Date of receipt of goods, or
2. Date of payment as entered in the books
of account of the recipient or the date
on which the payment is debited from
his bank account, whichever is earlier, or
3. 31st day from the date of issue of invoice
by the supplier
Where the above events are not ascertainable, the time of supply shall be the date of entry in the
books of account of the recipient of supply.
Time of supply of services [Section 13(3)]
Earliest of the following:
1. Date of payment as entered in the books
of account of the recipient or the date
on which the payment is debited from
his bank account, whichever is earlier, or
2. 61st day from the date of issue of invoice
by the supplier
Import of service from associated enterprise:
Date of entry in the books of account of the
recipient or the date of payment, whichever is
earlier

Time of Supply of Vouchers Exchangeable for Goods and Services

Supply of vouchers exchangeable for goods and services [Sections 12(4) and 13(4)]
1. Supply of goods or services is identifiable at the time of issue of voucher → Date of issue of
the voucher
2. Other cases → Date of redemption of the voucher

Time of Supply of Goods and Services in Residual Cases

Supply of goods and services in residual cases [Sections 12(5) and 13(5)] i.e., where it is not
possible to determine the time of supply under the other provisions
1. Where a periodical return is required to be filed → Due date of filing such return
2. Other cases → Date of payment of tax

Time of Supply for Addition in Value by way of Interest/Late Fee/Penalty

for Delayed Payment of Consideration
Addition in value by way of interest, late fee/penalty for delayed payment of Consideration
Time of Supply →Date on which the supplier receives such addition in value

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Question 1

M/s Mansh & Vansh Trading company, a registered supplier, is liable to pay GST under forward charge.
Determine the time of supply from the following information furnished by it:

1. Goods were supplied on 03-10-2022

2. Invoice was issued on 05-10-2022
3. Payment received on 09-10-2022

Solution

As per Section 12(2), the time of supply of goods shall be the earlier of the following dates, namely:

1.
a. The date of issue of invoice by the supplier; or
b. The last date on which he is required u/s 31(1), to issue the invoice with respect to the
supply; or
2. The date on which the supplier receives the payment with respect to supply.

As per Section 31(1) of the Act, a registered person supplying taxable goods shall issue invoice before
or at the time of:

1. Removal of goods for supply to the recipient, where the supply involves movement of goods;
or
2. Delivery of goods or making available thereof to the recipient, in any other case.

Thus, in this case, the time of supply of goods shall be 03-10-2022, i.e., the last date on which he is
required to issue the invoice with respect to the supply.

Question 2

Gas is supplied by a pipeline to the recipient. The supply is to be made for a period of one year. Monthly
payments are to be made by the recipient as per the contract. The details of the payment made are:

July 5, August 5, September 5 Payments of ₹ 2 lakh made in each month

Determine the time of supply for the purpose of payment of tax.

Solution

As per Notification No. 66/2017 CT dated 15.11.2017, a registered person (excluding composition
supplier) has to pay GST on the outward supply of goods at the time of supply as specified in section
12(2)(a), i.e., date of issue of invoice or the last date on which invoice ought to have been issued in
terms of section 31. As per section 31(4), in case of continuous supply of goods, where successive
statements of accounts or successive payments are involved, the invoice is issued before or at the time
of each such statement is issued or, as the case may be, each such payment is received. Therefore,
invoices should be issued for ₹ 2 lakh each on or before July 5, August 5 and September 5, when
monthly payments of ₹ 2 lakh are received.

Thus, assuming that the invoice is issued on July 5, August 5 and September 5, the time of supply for
the purpose of payment of tax will be July 5, August 5 and September 5 respectively for goods valued
at ₹ 2 lakh each.

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Question 3

From the following information, determine the time of supply if goods are supplied on approval basis:

S. No. Removal of Goods Issue of Invoice Accepted by Recipient Receipt of Payment

1. 01-12-2022 15-12-2022 05-12-2022 25-12-2022
2. 01-12-2022 25-07-2023 25-07-2023 20-07-2023

Solution

Time of supply of goods in each of the above cases has been given in the following table:

S. Removal Issue of Accepted Receipt of Time of Reason

No. of Goods Invoice by Payment Supply
Recipient
1. 01-12- 15-12- 05-12- 25-12- 05-12- TOS shall be the date of
2022 2022 2022 2022 2022 acceptance by the recipient as
invoice was issued after that
date.
2. 01-12- 25-07- 25-07- 20-07- 01-06- TOS shall be date after expiry of
2022 2023 2023 2023 2023 6 months from the date of
removal, since invoice is not
issued within 6 months from the
date of removal and payment is
also received after such date.

Question 4

Determine the time of supply from the given information.

May 4 Supplier invoices goods taxable on reverse charge basis to Bridge & Co. (30 days from
the date of issuance of invoice elapse on June 3)
May 12 Bridge & Co receives the goods
May 30 Bridge & Co makes the payment

Solution

Here, May 12 will be the time of supply, being the earliest of the three stipulated dates namely, receipt
of goods, date of payment and date immediately following 30 days of issuance of invoice [Section
12(3)]. (Here, date of invoice is relevant only for calculating thirty days from that date.)

Question 5

XYZ Ltd. has purchased for its customers 100 vouchers dated 24-12-2022 worth ₹ 1,000 each from ABC
Ltd., a footwear manufacturing company. The vouchers were issued by ABC Ltd. on 25-12-2022. The
vouchers can be encashed at retail outlets of ABC Ltd. The employees of XYZ Ltd. encashed the same
on 01-01-2023. Determine time of supply of vouchers.

Solution

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In case of supply of vouchers by a supplier, the time of supply shall be the date of issue of voucher, if
the supply is identifiable at that point. In this case, the supply of goods, i.e., footwear is identifiable
with the voucher, hence time of supply shall be the date of issue of such vouchers by ABC Ltd., i.e., 25-
12-2022.

Question 6

Mr. X supplied goods for ₹ 50,000 to its customer Miss Diyana on 1st January on the condition that
payment for the same will be made within a week. However, Miss Diyana made payment for the said
goods on 2nd February and thus, paid interest amounting to ₹ 2,000.

What is the time of supply with regard to addition in the value by way of interest in lieu of delayed
payment of consideration?

Solution

As per section 12(6), the time of supply with regard to an addition in value on account of interest, late
fee or penalty or delayed payment of consideration is the date on which the supplier received such
additional consideration.

Thus, time of supply in respect of interest would be the date on which the supplier has received such
additional consideration, i.e., 2nd February.

Question 7

XYZ & Co., a firm of Chartered Accountants, issued invoice for services rendered to Mr. A on 7 th
September. Determine the time of supply in the following independent cases:

1. The provision of service was completed on 1st August and payment was received on 28th
September.
2. The provision of service was completed on 14th August and payment was received on 28th
September.
3. Mr. A made the payment on 3rd August. However, provision of service was remaining to be
completed at that time.
4. Mr. A made the payment on 15th September. However, provision of service was remaining to
be completed at that time.

Solution

The time of supply of services is the date of issue of invoice if the same is issued within 30 days from
the date of supply of service OR the date of receipt of payment, whichever is earlier [Section 13(2)(a)].

In case the invoice is not issued within 30 days from the date of supply of service, time of supply is the
date of provision of service OR the date of receipt of payment, whichever is earlier [Section 13(2)(b)].

In accordance with the aforesaid provisions, the time of supply in the four independent cases will be:

1. 1st August since the invoice is not issued within 30 days of supply of service.
2. 7th September since the invoice is issued within 30 days of supply of service and the payment
is received after the issuance of invoice.

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 3. 3rd August viz., earlier of date of issuance of invoice (7th September) or date of receipt of
payment (3rd August)
4. 7th September viz., earlier of date of issuance of invoice (7th September) or date of receipt of
payment (15th September)

Question 8

From the following information, determine the time of supply of services. The supply is a continuous
supply of service where contract provides for monthly payment up to 15th of the succeeding month.

Entry of Provision of Invoice Date Due Date of Payment Receipt of Payment

Services in Books as per Contract
30-11-2022 07-12-2022 15-12-2022 20-12-2022
31-12-2022 22-01-2023 15-01-2023 20-01-2023
31-01-2023 15-02-2023 15-02-2023 11-02-2023

Solution

Time of Supply of services in each of the above cases has been given in the following table:

Entry of Invoice Due Date of Receipt of Time of Reason

Provision of Date Payment as Payment Supply
Services in per Contract
Books
30-11-2022 07-12- 15-12-2022 20-12- 07-12- Since invoice is issued prior
2022 2022 2022 to due date and payment is
received after the date of
invoice.
31-12-2022 22-01- 15-01-2023 20-01- 31-12- Since invoice is issued after
2023 2023 2023 due date of payment,
therefore, Time of Supply is
the date of provision of
service or receipt of
payment, whichever is
earlier.
31-01-2023 15-02- 15-02-2023 11-02- 11-02- Since invoice is issued
2023 2023 2023 timely, and payment is
received before the due
date of payment, time of
supply is the date of issue
of invoice or receipt of
payment whichever is
earlier.

Question 9

Golden Industries Ltd. engaged the services of Sandhu transporter for road transport of a consignment
on 25-12-2022 and made advance payment for the transport on the same date, i.e., 25-12-2022.
However, the consignment could not be sent immediately on account of a strike in the factory, and

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instead was sent on 20-01-2023. Invoice was received from the transporter on 22-01-2023. What is
the time of supply of the transporter’s service?

Note: Transporter’s service is taxed on reverse charge basis.

Solution

Time of supply of service taxable under reverse charge is the earlier of the following two dates in terms
of Section 13(3):

• Date of payment
• 61st day from the date of issue of invoice

In this case, the date of payment precedes 61st day from the date of issue of invoice by the supplier of
service. Hence, the date of payment, i.e., 25-12-2022 will be treated as the time of supply of service.

Question 10

From the following information, determine the time of supply of services where supply is by issue of
voucher (for the same nature of service) valid for one year and are issued after supply of first service.

First Service Issue of Voucher Redemption of Voucher Last Date for Acceptance of Voucher
01-01-2023 01-01-2023 31-10-2023 31-12-2023

Solution

Time of supply of services in each of the above cases has been given in the following table:

First Issue of Redemption Last Date for Time of Reason

Service Voucher of Voucher Acceptance of Supply
Voucher
01-01- 01-01- 31-10-2023 31-12-2023 01-01- TOS is the date of issue of
2023 2023 2023 voucher since supply is
identifiable at the time of
issuance of voucher.

Question 11

An income-tax search was carried out at residential premises of Mr. X, working in a multinational
company. In course of search, large volume of undisclosed assets was found, which he claims as service
income. On this basis, the GST authorities investigate the GST liability. Dates of provision of service,
whether in the first half or the second half of the financial year being scrutinized by income-tax
authorities, are not known. Mr. X voluntarily pays GST during the investigation. What is the time of
supply of the services?

Solution

As per the provisions of Section 13(5)(b) of the CGST Act, 2017, where it is not possible to determine
the time of supply in terms of date of invoice or date of provision of service or date of receipt of
payment or date of receipt of services in the books of account of the recipient, and where periodical
return is not filed (Mr. X, being an employee in a multinational company, is not a registered person),
the date of payment of tax is taken as the time of supply. Therefore, the date when Mr. X pays the GST
will be the time of supply.

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