Time of Supply

Chapter 4 - Time of Supply

● The time of supply indicates when a supply is deemed to have been made. The CGST Act provides separate
time of supply of goods and services. These provisions are as applicable for IGST, SGST and UTGST.
● Once it is decided that a particular activity is a supply, the charge is created as per charging section and
GST is levied but liability to pay GST arises as per the time of supply.
● We can say that the point in time when the liability to pay GST arises is known as time of supply.
● The supplier can pay GST upto the last day of filing of return. You can say that at time of supply the liability
to pay GST arises and the last day of filing of return of GST is the due date of payment of GST liability which
was created as per time of supply.

● A supply may have various stages as shown in the diagram above. We need to choose one event as time of
supply upon which liability to pay GST will arise. Once liability is fixed it must be discharged on or before
the due date of return of the particular period in which the liability was fixed.
● For example, if Time of Supply (TOS) of a supply was fixed in April, it means liability to GST pay arised in
april, now let us say last day of filing of return of for the month of April is 20th May, then liability shall be
discharged by 20th may, otherwise interest will be levied under section 50.
● For determining the time of supply one of the most important components is the date of invoice, so we
must learn about the date of issue of invoice first.

Time limit for issuance of invoice in case of supplier of goods - Section 31 of CGST Act (+) Rule 47 of
CGST Rules

General Case

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 Time of Supply

CONTINUOUS SUPPLY OF GOODS

Last date of invoice
In case of continuous supply of goods where successive statements of accounts/successive payments are
involved, invoice needs to be issued before or at the time of issuance of periodical statement (By supplier) or
receipt of periodical payment (By Recipient to supplier)

Invoice needs to be issued every time the periodical statement is issued by the supplier or payment is received
from the recipient.

For example Payment is received from recipient on 6/8/24 for month of July, The last date of issue on invoice for
the month july is 6/8/24. If no payment was received and the supplier issued the statement on 10/08, then the last
date of invoice should be 10/08.

Continuous supply of goods (Section 2(32))

“Continuous supply of goods” means a supply of goods-
● Which is provided, or agreed to be provided,
● continuously or on recurrent basis,
● under a contract,
● whether or not by means of a wire, cable, pipeline, etc, and
● for which the supplier
○ invoices the recipient
■ on a regular or periodic basis, and
● Includes supply of such goods as the Government may, subject to such conditions, as it may, by
notifications, specify.

Provisions relating to the time of supply (TOS) of goods in case of forward charge i.e., normal supply of
goods.

Time of supply of goods (Section 12)

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. (Taxpayer cannot challenge the time of supply)

2. The time of supply of goods shall be the earlier of the following dates, namely:-
a. The dates of issue of invoice by the supplier ; or
b. The last date on which he is required, u/s 31 to issue the invoice with respect to the supply; or

Determine the Time of supply in each of the following independent cases in accordance with the provisions of Section 12 of
the CGST Act, 2017 in case supply involves movement of goods.
S.No Date of Removal Date of invoice Date when goods made Date of receipt of payment
available to recipient
1. 01-10-2023 02-10-2023 03-10-2023 15-11-2023
2. 03-10-2023 01-10-2023 04-10-2023 25-11-2023
3. 04-11-2023 04-11-2023 06-11-2023 01-10-2023

Time of supply of goods in each of the above cases has been given in following table-
S. No Date of Date of Last Date when Date of Time of Reason
Removal invoice date of goods made receipt of supply
Invoice available to payment
recipient
1. 01-10-2023 02-10-2023 03-10-2023 15-11-2023 01-10-2023_ Since, invoice is not issued on or
before the date of removal of goods,
hence time of supply is the date of
removal of goods.

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 Time of Supply

2. 03-10-2023 01-10-2023 04-10-2023 25-11-2023 01-10-2023 TOS is the date of issuance of invoice
since invoices are issued prior to date
of removal of goods.
3. 04-11-2023 04-11-2023 06-11-2023 01-10-2023 04-11-2023 TOS is date of issue of invoice. No GST
will be payable on advances received
for supply of goods.

Determine the Time of supply in each of the following independent cases in accordance with the provisions of Section 12 of
CGST Act, 2017 in case supply does not involve movement of goods.

S.No Date of invoice Date when goods made available to recipient Date of receipt of
payment
1. 02-10-2023 03-10-2023 15-11-2023
2. 04-10-2023 01-10-2023 25-11-2023
3. 04-11-2023 06-11-2023 01-10-2023

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

S.no Date of invoice Date when goods made Date of receipt Time of supply Reason
available to recipient of payment
1. 02-10-2023 03-10-2023 15-11-2023 02-10-20 23 TOS is date of issuance of invoice
since invoice is issued prior to
date when goods are made
available to recipient.
2. 04-10-2023 01-10-2023 25-11-2023 01-10-2023 TOS is date when goods are made
available to the recipient and date
of issuance of invoice is after that
date.
3. 04-11-2023 06-11-2023 01-10-2023 04-11-2023 TOS is date of issue of invoice. No
GST will be payable on advances
received for supply of goods

Question
During the course of search it was found that 500 Boxes of tiles were dispatched on 28th August. But no invoice was made
and the boxes were not entered in the accounts. There was no evidence of receipt of payment. What is the time of supply of
the 500 boxes?

Time of supply of goods is the earlier of the following two dates in terms of section 12(2) :
● Date of issue of invoice/ last date on which the invoice is required to be issued.

In this case since the invoice has not been issued, the time of supply will be the last date on which the invoice is required to be
issued or date of receipt of payment, whichever is earlier.

The invoice for the supply of goods must be issued on or before the despatch of goods i.e,. On 28-08. Since there is no
evidence of receipt of payment, time of supply of the goods will be 28-08, the date when the invoice should have been issued.

Question
A machine has to be supplied at site. It is done by sourcing various components from vendors and assembling the machines
at site. The details of the various events are :

15-12-2023 Purchase order with advance of Rs 1,25,000 is received for machine worth Rs 25,00,000 and entry duly
made in the seller’s books of account.
25-01-2024 The machine is assembled, tested at site, and accepted by buyer
30-01-2024 Invoice raised.

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 Time of Supply

10-02-2024 Balance payment of Rs 23,75,000 received.

Determine the time of supply (ies) in the above scenario in the above scenario 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.
Therefore, the time of supply of goods for the entire amount of Rs. 25,00,000 is 25-01-2024 which is the date on which the
goods were made available to the recipient as per Section 31(1)(b), and the invoice should have been issued on this date
section 12(2)(a)) .

Question
Continuous supply of goods - From the following information determine the time of supply if there is continuous supply of
goods.
S. no Invoice date Removal of goods Statement of goods Receipt of payment

1. 01-12-20 _ _ 15-11-20 _ _ 05-12-20 _ _ 02-12-20 _ _

25-11-20 _ _

2. 21-01-20 _ _ 18-01-20 _ _ 05-01-20 _ _ 10-02-20 _ _

31-01-20 _ _

Solution - time of supply of goods in each of the above cases has been given in following table-

S. no Invoice date Removal of Statement of Receipt of Time of Reason

goods accounts payment supply

1. 01-12-20 _ _ 15-11-20 _ _ 05-12-20 _ _ 02-12-20 _ _ 01-12-20 _ _ TOS is the date of invoice since
25-11-20 _ _ invoice is issued before the
statement of account.

2. 21-01-20 _ _ 18-01-20 _ _ 05-01-20 _ _ 10-02-20 _ _ 05-01-20 _ _ TOS is the date of statement of

account since invoice is issued
31-01-20 _ _ after the date of statement of
account and payment is also
received after that date.

Question
Continuous supply of goods : LPG is supplied by a pipeline. Monthly payments are made by the recipient as per contract .
Every quarter, an invoice is issued by the supplier supported by a statement of the goods dispatched and payments made,
and the recipient has to pay the differential amount, if any. The details of the various events are :
03-11-2023, 03-12-2023, 01-01-2024 Payments of Rs 5 lakh made in each month.

02-01-2024 Statement of accounts issued by supplier, with invoice for the quarter
October 2023 to December 2023.

25-01-2024 Differential payment of Rs 78,000 received by supplier for the quarter

October 2023 to December 2023.

Determine the time of supply.

Solution : 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.

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 Time of Supply

As per section 31(4), in the 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,
monthly payment of Rs 5 lakh are received.

Thus, time of supply will be 3-11-2023, 03-12-2023 and 01-01-2024 respectively for goods valued at 5 lakh each. Time of
supply of goods valued at Rs 78,000 will be 02-01-2024, the date of issuance of invoice.

Time of supply of goods for supplies taxed under reverse charge mechanism 12(3)
In case of supplies in respect of which tax is paid or liable to be paid on reverse charges basis the time of supply
shall be the earliest of the following dates, namely:-
a. The date of receipt of goods; or
b. Date of Payment
c. The date immediately following 30 days from the date of issue of invoice or any other document, by
whatever name called, in lieu thereof by the supplier.

Date of Payment
1. The date of payment as entered in the books of account of recipient
2. The date on which the payment is debited in his bank account,
Whichever is earlier

Determine the Time of supply in each of the following independent cases in accordance with the provisions of Section 12 of
the CGST Act, 2017 in case the recipient of goods is liable to pay tax under reverse charge mechanism.
S.no Date of invoice Date of receipt of goods Date of payment made in Date when payment debited in
books bank account
1. 01-10-2023 05-10-2023 10-10-2023 12-10-2023
2. 01-10-2023 15-10-2023 10-10-2023 12-10-2023
3. 01-10-2023 15-10-2023 12-10-2023 10-10-2023
4. 01-10-2023 15-11-2023 18-11-2023 20-11-2023
Time of supply of goods in each of the above cases has been given in following table-
S.no Date of invoice Date of receipt of Date of payment Date when Time of Reason
goods made in books payment debited supply
in bank account
1. 01-10-2023 05-10-2023 10-10-2023 12-10-2023 05-10-2023 TOS is date of receipt of
goods
2. 01-10-2023 15-10-2023 10-10-2023 12-10-2023 10-10-2023 TOS is date of payment in

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 Time of Supply

books
3. 01-10-2023 15-10-2023 12-10-2023 10-10-2023 10-10-2023 TOS is the date when payment
is debited in a bank account.
4. 01-10-2023 15-11-2023 18-11-2023 20-11-2023 01-11-2023 TOS is the date immediately
following 30 days from the
date of issue of invoice by the
supplier.

Section 12(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.

Ms Saniya Khan purchased a gift voucher from Shoppers Stop (a departmental store) worth Rs 15000 on 30-11-2023 and
gifted it to her friend on the occasion of her birthday on 06-12-2023.
Her friend encashed the same on 01-01-2024 for purchase of a keyboard. Determine the time of supply.

In this case the supply is not identified with the voucher. The holder of a voucher can purchase anything from Shoppers Stop.
Hence, time of supply is the date of redemption of vouchers, i.e., the date of purchase of goods by the holder of the voucher
i.e., 01-01-2024.

Not possible to determine the time of supply - 12(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—
a. in a case where a periodical return has to be filed, be the date on which such return is to be filed; or
b. in any other case, be the date on which the tax is paid.

For example :
Investigation reveals clandestine removal of goods by a supplier who is not registered under GST. The evidence is in the form
of noting, often undated, and some corroborative material. The supplier voluntarily pays tax during the investigation, to close
the case. The time of supply will be the date on which the tax is paid, as being unregistered, the supplier is not required to file
periodical returns.

Addition in the value of supply - 12(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.

Mr. NP ,a registered supplier, supplied certain goods to Mr. DB on 5 months credit with a penalty clause in the agreement
levying a penalty of 10% of the invoice value in case of delayed payment. The invoice was dated 01-12-2023 being the date of
delivery. Mr. DB could not make the payment on the due date due to unavoidable reasons. He however made the payment of
the invoice value on 06-08-2023. Mr. NP raised a debit note for the penalty amount. There being dispute on this, the matter
was in arbitration which was finally resolved with Mr. DB agreeing to pay half of the penalty amount. The amount was paid by
Mr.DB on 16-12-2023. Determine the Time of supply in light of the GST law.
With respect to the goods supplied, the time of supply shall be 01-12-2023 as per section 12(2).
With respect to the penalty amount the TOS shall be the date of payment by Mr. DB towards the penalty charges i.e.,
16-12-2023 ( as per section 12(6).

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 Time of Supply

Section 13 - Time of Supply in Case of Service

13. (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.

Section 13(2) - ToS - Service - Forward Charge

The time of supply of services shall be the earliest of the following dates, namely
a. the date of issue of invoice by the supplier, if the invoice is issued within the period prescribed under section
31 or the date of receipt of payment, whichever is earlier; or
b. the date of provision of service, if the invoice is not issued within the period prescribed under section 31 or
the date of receipt of payment, whichever is earlier; or
c. 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 upto 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.

NOTE - "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.

If
● a part of the consideration is paid in advance or
● invoice is issued for part payment,
● the time of supply will not cover the full supply.
● The supply shall be deemed to have been made to the extent it is covered by the invoice or the part
payment.

The limit for issuing tax invoice in case of service - Section 31 read with relevant rules.
Taxable supply of services - Time limit - 30 days from the date of supply of services
The invoice in case of taxable supply of services shall be issued within a period of 30 days from the date of supply
of service.

Insurers, banks etc. - Time limit-45 days : Where the supplier of services is an insurer or a banking company or a
financial institution, including a non-banking financial company, the invoice or any document in lieu thereof is to be
issued within 45 days from the date of supply of service.

Time of Supply In Case of Service (Forward Charge)

Determine the time of supply in each of the following independent cases in accordance with the provisions of CGST Act,
2017 :

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 Time of Supply

S.no Date of actual provision of Time (Date) of Invoice, Bill or Date on which payment received
service Challan as the case may be
1. 10-11-2023 30-11-2023 15-12-2023
2. 10-11-2023 30-11-2023 15-11-2023
3. 10-11-2023 30-11-2023 15-11-2023 (Part) and 10-12-2023 (remaining)
4. 10-11-2023 30-11-2023 06-11-2023 (Part) and 09-11-2023 (remaining)
5. 10-11-2023 30-11-2023 06-11-2023 (Part) and 16-11-2023 (remaining)
6. 10-11-2023 12-12-2023 30-04-2024
7. 10-11-2023 12-12-2023 05-11-2023 (Part) and 25-12-2023 (remaining)
8. 10-11-2023 22-12-2023 12-12-2023

Solution : Time of supply of services in each of the above cases has been given in following table-
S.no Date of Date of invoice Date of receipt of Time of supply Remarks
provision of payment
service
1. 10-11-2023 30-11-2023 15-12-2023 30-11-2023 Invoice issued within 30 days and before
receipt of payment
2. 10-11-2023 30-11-2023 15-11-2023 15-11-2023 Invoice issued within 30 days but payment
received before invoice.
3. 10-11-2023 30-11-2023 15-11-2023 15-11-2023 and Invoice issued within 30 days. Part
(Part) and 30-11-2023 for payment received before invoice and
10-12-2023 respective remaining payment after invoice.
(remaining) amounts
4. 10-11-2023 30-11-2023 06-11-2023 06-11-2023 and Invoice issued within 30 days. However,
(Part) and 09-11-2023 for the advance has been received in two
09-11-2023 the respective installments before the date of
(remaining) amounts completion of service. Thus, the date of
receipt of each such advance shall be
treated as TOS.
5. 10-11-2023 30-11-2023 06-11-2023 06-11-2023 and Invoice issued within 30 days . part
(Part) and 16-11-2023 for payment (in the form of advance) received
16-11-2023 the respective before issue of invoice and remaining
(remaining) amounts payment received after completion of
service.
6. 10-11-2023 12-12-2023 30-04-2024 10-11-2023 Invoice not issued within 30 days and
payment received after completion of
service.
7. 10-11-2023 12-12-2023 05-11-2023 05-11-2023 and Invoice not issued within 30 days . part
(Part) and 10-11-2023 for payment received as advance before
25-12-2023 respective completion of service and remaining
(remaining) amounts payment received subsequently.
8. 10-11-2023 22-12-2023 12-12-2023 10-11-2023 Invoice not issued within 30 days and
entire payment received after completion
of service.

Question
Determine the time of supply from the following particulars :

25-07-2023 Booking of convention hall, sum agreed Rs 15,00,000 advance of Rs 1,01,000 received.
10-11-2023 Event held in convention hall

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 Time of Supply

20-12-2023 Invoice issued for Rs 15,00,000 indicating balance of Rs 13,99,000 payable

25-12-2023 Balance payment of Rs 13,99,000 received.

Solution : As per section 31 read with Rule 47 of CGST Rules, the tax invoice is to be issued within 30 days of supply of
service. In the given case, the invoice is not issued within the prescribed time limit. As per Section 13(2)(b), in a case where
the invoice is not issued within the prescribed time, the time of supply of services is the date of provision of service or receipt
of payment, whichever is earlier.

Therefore, the time of supply of service to the extent of Rs 1,01,000 is 25-07-2023 as the date of payment of Rs 1,01,000 is
earlier than the date of provision of service. The time of supply of service to the extent of the balance Rs 13,99,000 is
10-11-2023 which is the date of provision of service.

Question
BRIGHT LTD. receives the order and advance payment on 25-08-2023 for carrying out an architectural design job. It delivers
the design on 30-10-2023. By oversight, no invoice is issued at that time, and it is issued much later, after the expiry of the
prescribed period for issue of invoice. When is the time of supply of services?

Ans : since the invoices has not been issued within the prescribed time period, time of supply of service will be the earlier of
the following two dates in term of section 13(2)(b) :
➢ Date of provision of service
➢ Date of receipt of payment

The payment was received on 25-08-2023 and the services were provided on 30-10-2023. Therefore, the date of payment, i.e.,
25-08-2023 is the time of supply of the service in this case.

Continuous supply of services - Section 2(33)

“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 3 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.

One very common example of CSS can be postpaid mobile connection as it has all the elements as mentioned in
the definition of the CSS.

Issuance of invoice in case of continuous supply of services (Section 31(5)) :

In case of continuous supply of services -

1. Where the due date of payment is The invoice shall be issued on or before the due date of
ascertainable from the contract payment.

2. Where the due date of payment is not The invoice shall be issued before or at the time when the
ascertainable from the contract supplier of service receives the payment.

3. Where the payment is linked to the The invoice shall be issued on or before the date of
completion of an event completion of that event.

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 Time of Supply

NPV Ltd. entered into a contract for annual maintenance services of the heating plant to D Ltd. (Recipient), As per the terms of
contract, D Ltd. will settle monthly payments by the 15th of the next month.
Due Date of Issue of Invoice Date of Invoice Date of receipt of payment Time of Supply
March 15 March 10 March 15 March 10
March 15 Feb 28 March 28 Feb 28
March 15 March 14 -------- March 14
March 15 March 14 26 Feb 26 Feb
March 15 -------- March 17 __________________ (date of
completion of service)
March 15 March 25 March 14 __________________ (date of
completion of service)
March 15 ------------ 26th Feb 26th Feb

Section 13(3) - ToS - Service - Reverse Charge

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

a. 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
b. 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:

Provided that where it is not possible to determine the time of supply under clause (a) or clause (b),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. (DATE OF ENTRY or DATE OF PAYMENT whichever is earlier)

DOP DOI 61st Day TOS

10/8 29/6 29/8 10/8
10/8 1/6 1/8 1/8
Part 30/6 29/6 29/8 30/6
Part 1/9 29/6 29/8 29/8

Time of supply in reverse charge

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 Time of Supply

Pooja Industries Ltd. engaged the services of Mohit transporter for road transport of a consignment on 25-11-2023 and
made advance payment for the transport on the same date, i.e., 25-11-2023. However, the consignment could not be sent
immediately on account of a strike in the factory, and instead was sent on 20-01-2024, invoice was received from the
transporter on 22-01-2024. What is the time of supply of the transporter’s service?
Note : Transporter’s service is taxed on a 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., 25-11-2023 will be treated as the time of supply of service.

Associated Enterprise
GP Ltd. is located in India and holds 51% of shares of SB Ltd. a Canada based company. SB Ltd. provides Business
Auxiliary services to GP Ltd. From the following details, determine the time of supply of GPLtd. :

Agreed consideration US $ 1,00,000

Date on which services are provided by SB Ltd. 16-12-2023
Date on which invoices sent by SB Ltd. 19-12-2023
Date of debit in the books of account of GP Ltd. 30-12-2023
Date on which payment is made by GP Ltd. 23-03-2024

Solution : GP. of India and SB Ltd. of US are “associated enterprises” as Section 92A of Income Tax Act, 1961, since Indian
companies hold 51% shareholdings of Canada based company. As per Section 13(3) of CGST, Act, 2017, in case of supply
by associated enterprises, where the supplier of service is located outside India, the time of supply shall be -
a) The date of entry in the books of account of the recipient of supply ; or
b) The date of payment,
Whichever is earlier;

Therefore, the time of supply shall be 30-12-2023.

TIME OF SUPPLY OF VOUCHERS Section 13(4) of CGST Act.

The time of supply of vouchers that are exchangeable for services is stipulated as:-
● the date of issue of the voucher - if the supply is identifiable at that point, or
● the date of redemption of the voucher - in other cases.

TIME OF SUPPLY IN RESIDUAL CASES - Section 13(5) of CGST Act.

If the situation is not covered by any of the provisions discussed above, the time of supply is fixed under
sub-section (5) of section 13, in the following manner:
● Date on which periodical return for the period is required to be filed, or
● In any other case, date on which GST is paid.

TIME OF SUPPLY IN CASE OF ENHANCEMENT IN VALUE DUE TO DELAYED PAYMENT OF

CONSIDERATION - Section 13(6) of CGST Act.
● Time of supply in case of addition in value by way of interest/ late fee/penalty for delayed payment of
consideration for a service is the date on which the supplier receives such addition in value.

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