Time of Supply FAQs — GST Sections 12 & 13 Explained

These questions are drawn from real GST compliance scenarios, litigation, and common queries from practitioners. Answers reflect the law as amended up to Finance Act 2024.

• 1 What is the time of supply of goods under Section 12 of the CGST Act?

  Under Section 12(2), the time of supply of goods is the earliest of: (a) the date of issue of invoice or the last date by which the invoice was required to be issued under Section 31; or (b) the date on which payment is received by the supplier. Where the supplier receives payment before issuing the invoice, the receipt of payment triggers the tax point.

• 2 When does GST liability arise for continuous supply of services?

  For continuous supply of services under Section 13(3), the time of supply is the due date of payment as specified in the contract between the parties. If no such date is ascertainable from the contract, ToS is the date of completion of each event specified in the contract. Where payment is received or an invoice is issued before the due date, the earlier of those dates becomes the ToS.

• 3 What is the time of supply under reverse charge mechanism?

  For reverse charge on receipt of services (Section 13(3) proviso), the time of supply is the earliest of: (a) the date of payment as entered in the books of the recipient; or (b) the date immediately following 60 days from the date of invoice issued by the supplier. Where payment date cannot be determined, 60 days from the invoice date is treated as the ToS.

• 4 How does a change in GST rate affect the time of supply?

  Section 14 contains special ToS rules for transactions straddling a rate change. Where goods or services are supplied before a rate change but invoiced or paid after, the new rate applies if the invoice is issued within the prescribed period and the payment is received after the rate change. The practical impact is that businesses must track the exact date of supply, invoice, and payment around any rate-change notification.

• 5 Can interest be levied for wrong determination of time of supply?

  Yes. Interest under Section 50 of the CGST Act is levied on the net tax liability that remains unpaid beyond the due date for filing GSTR-3B. If a taxpayer determines the wrong time of supply — e.g., reports a supply in a later month when it was taxable in an earlier month — interest accrues from the correct due date to the date of actual payment, irrespective of whether the error was inadvertent.

• 6 What is the time of supply for goods sent on approval?

  Under Section 12(4), for goods sent on approval (sale or return basis), the time of supply is the earlier of: (a) the date on which it becomes known that the supply has taken place (i.e., the date of approval or acceptance by the buyer); or (b) six months from the date of removal of goods. Goods not returned or rejected within six months are deemed supplied on the date of expiry of that period.

• 7 What is the time of supply for vouchers under GST?

  Section 12(4) for goods and Section 13(4) for services address vouchers. Where the supply is identifiable at the point of issue of the voucher (single-purpose voucher), ToS is the date of issue of the voucher. For multi-purpose vouchers where the supply is not identifiable at issue, ToS is the date of redemption of the voucher. This distinction is critical for digital gift cards and loyalty-point redemptions.

• 8 How is time of supply determined when invoice is not issued within the prescribed period?

  Under Section 12(2)(a), if the invoice is not issued within the period prescribed under Section 31 (generally at or before delivery for goods, and within 30 days of completion of service for services), the ToS is the last date by which the invoice should have been issued — not the actual date of issue. This effectively accelerates the tax point and interest liability for invoice delays.