Chapter - 8
TIME OF SUPPLY
TIME OF SUPPLY (TOS)
GST is payable on supply
A supply consists of elements that can be separated in time like agreement to
supply, delivery of goods, provision of services, issue of invoice, payment, and
entry of the payment in the records or deposit in the bank.
So, at which of these points of time does GST become payable ?
TOS is
Point in time when the
liability to pay tax arises
TIME OF SUPPLY (TOS)
TIME OF SUPPLY OF GOODS TIME OF SUPPLY OF SERVICES
(SECTION 12) (SECTION 13)
Under Forward charge Sec. Under Forward charge Sec.
12 (2) 13 (2)
Under Reverse charge Sec. Under Reverse charge Sec.
12 (3) 13 (3)
For exchangeable vouchers For exchangeable vouchers
of goods Sec.12 (4) of goods Sec.13 (4)
Residual cases Sec. 12 (5) Residual cases Sec. 13 (5)
TIME OF SUPPLY OF GOODS – SEC 12(2)
Date of issue of invoice or
Whichever is earlier
Last date of issue of invoice under
section 31*
Date of receipt of payment
(date on which payment is entered
in the books of Accounts of supplier
or
Date on which payment is credited
to the supplier’s bank a/c
whichever is earlier)
TIME OF SUPPLY OF GOODS
*Time of issue of invoice in the case of Supply of Goods by the supplier [Section 31(1)]:
Supply involves movement: Before or at the time of removal of goods for supply
[31(1)(a)]
Supply - Other cases: Before or at the time of Delivery of goods/ making available to
the recipient or [31(1)(b)]
Continuous Supply: before or at the time of issue of successive statement of
account/receipt of payment [31(4)]
Sale on approval basis: Earlier of
a) Before/ at the time of supply* (*when the recipient indicates that
he has accepted the supply of goods); OR
b) 6 months from date of removal [31(7)]
The following data is noted from the records of X Ltd. (supplier) and Y Ltd. (recipient of goods).
Determine the time of supply of goods from the given information.
Question Solution
Event Date
27-2- Date of issue of invoice by the Date of issue of invoice (Since issued 27-2-
within time limit u/s 31) 2020
2020 supplier
Date of payment as entered in books of
account i.e. 29-2-2020 ; or
28-2-
Date of removal of goods
2020 Date on which Payment is credited in the 29-2-
bank account i.e. 10-3-2020 ; whichever 2020
29-2- Date when payment is entered in
is earlier
2020 books of account
DATE OF PAYMENT
10-3- Date on which payment is credited
TIME OF SUPPLY as per Section 12(2) 27-2-
2020 in bank account Earliest of the above 2020
TIME OF SUPPLY OF GOODS – SEC 12(2)
In summary, provisions regarding amount received in advance in respect of goods
Period Taxability of amount received in advance
Aggregate turnover of Aggregate turnover of
supplier supplier
₹ 1.50 crores or less More than ₹ 1.50 crores
01.07.2017 to 12.10.2017 Taxable Taxable
13.10.2017 to 14.11.2017 Not taxable Taxable
15.11.2017 and onwards Not taxable Not taxable
However, This benefit is not available to person covered under Composition Scheme, Reverse Charge
mechanism and in the case of supply of services.
TIME OF SUPPLY OF GOODS – SEC 12(2)
CASES Invoice date Dueofdate of issue Date of Payment
invoice Time of supply
Receipt of advance of 2-Jan-2019 30-Dec-2019 30-Nov-2019* 30-Dec-2019
₹ 5 lakh
Receipt of advance of 2-Jan-2019 30-Dec-2019 29-Dec-19* 30-Dec-2019
₹ 20 lakh
Final payment 2-Jan-2019 30-Dec-2019 14-Jan-2020 30-Dec-2019
* w.e.f. 15-11-2017, TOS for supply of goods under forward charge shall be based upon the date
of invoice or the last date on which supplier is required to issue invoice, whichever is earlier.
TIME OF SUPPLY OF GOODS UNDER REVERSE
CHARGE – SEC 12(3)
Date of receipt of goods
Whichever is earlier
Date of payment as entered in the
books of Accounts of recipient or
Date on which payment is debited
in his bank a/c, whichever is earlier
Date immediately following 30
days from date of issue of invoice
or any other document
Where it is not possible to determine time of supply in the above cases: Date of entry in
the books of account of the recipient
The following data is noted from the records of X Ltd. (supplier) and Y Ltd. (recipient of goods
covered under reverse charge mechanism). Determine the time of supply of goods from the
given information. Solution
Question Event Date
Date of receipt of goods 12-8-2019
Date of issue invoice by the
2-7-2019 Date of payment as entered in 1-9-2019
supplier books of account of recipient i.e. 1-
9-2019 OR
Y Ltd. receives the goods, Date on which Payment is debited in
12-8-2019 the bank account of recipient i.e. 3-
which were held up in transit
9-2019; whichever is earlier
Payment made for the goods DATE OF PAYMENT
1-9-2019 and entered in books of Date immediately following 30 days 2-8-2019
from date of issue of invoice (i.e. 31st
recipient day)
Payment is debited in the bank Time of Supply as per Section 12(3) 2-8-2019
3-9-2019 Earliest of the above
account of recipient
TIME OF SUPPLY OF SERVICES – SEC 13(2)
Clause (a) Clause (b) Clause (c)
If invoice issued within If invoice not issued If both the clauses do not
prescribed time u/s 31 within prescribed time u/s apply
• Date of issue of invoice 31 • Date on which recipient
• Date of receipt of • Date of provision shows the receipt of
payment (completion) of service or services in his books of
whichever is EARLIER • Date of receipt of accounts
payment whichever is
EARLIER
Where payment of ₹ 1000/- is received in excess, then time of supply for goods or services at the
option of supplier is date of issue of invoice (Proviso to section 13(2)).
TIME OF SUPPLY OF SERVICES
*Time of issue of invoice in the case of Supply of Services by the supplier [Section 31(2)]:
Tax invoice is to be issued before or after the provision of service, but within 30 days from
the date of supply of services.
In case of insurer/banking company/financial institutions/NBFCs, this limit is 45 days from
the date of supply of services.
Continuous Supply of Services
Situation regarding due date of payment Invoice shall be issued
Due date of payment is ascertainable from the On or before the due date of Payment
contract
Due date of payment is not ascertainable from Before or at the time when the supplier of service
the contract receives the payment
When payment is linked to completion of the On or before the date of completion of that event.
event
When services are terminated in between before the completion of supply- invoice should be issued at the time
when supply ceases.
The following data is noted from the records of X Ltd. (supplier) and Y Ltd. (recipient).
Determine the time of supply of services from the given information. Solution
Question Event Date
Date of issue of invoice (Since issued
Date of issue of invoice by the within time limit u/s 31 .e. within 30 days 20-1-2020
20-1-2020 from supply of service)
supplier
Date of payment as entered in books of
account i.e. 18-1-2020 ; or
17-1-2020 Date of supply of service
Date on which Payment is credited in the
17-1-2020
18-1- Date when payment is entered bank account i.e. 17-1-2020 ; whichever
is earlier
2020 in books of account
DATE OF PAYMENT
17-1- Date on which payment is
2020 credited in bank account TIME OF SUPPLY as per Section 13(2)
Earliest of the above 17-1-2020
TIME OF SUPPLY OF SERVICES UNDER REVERSE
CHARGE – SEC 13(3)
Date of payment as entered in the
books of Accounts of recipient or
Whichever is earlier
Date on which payment is debited
in his bank a/c, whichever is
earlier
Date immediately following 60
days from date of issue of invoice
or any other document
Where it is not possible to determine time of supply in the above cases: Date of entry in the books
of account of the recipient
In case of import of services from an associated enterprises the time of supply is the date of entry
in the books of account of recipient of supply OR date of payment, whichever is earlier.
Mr. Parvesh supplied services to Mr. Pawan. The tax in respect of such services is payable by Mr. Pawan.
Determine the time of supply of services from the given information.
Question: Solution:
Date of issue invoice by the Event Date
14-3-2020 Date of payment as entered in books of 25-3-2020
supplier
account of recipient i.e. 26-3-2020 OR
Payment made for the goods
Date on which Payment is debited in the
26-3-2020 and entered in books of Mr. bank account of recipient i.e. 25-3-2020;
Pawan whichever is earlier
Payment is debited in the bank DATE OF PAYMENT
25-3-2020
account of Mr. Pawan Date immediately following 60 days 14-5-2020
from date of issue of invoice (i.e. 61st
day)
Time of Supply as per Section 13(3) 25-3-2020
Earliest of the above
TIME OF SUPPLY OF VOUCHERS –
SEC 12(4)/13(4)
Date of issue – If
supply is identifiable at Date of redemption of
the point of issue of voucher – Other cases
voucher
TIME OF SUPPLY OF VOUCHERS – SEC
12(4)/13(4)
ILLUSTRATIONS
Ms. Rhea gets voucher worth ₹ 5000 from Ms. Preeti gets a voucher worth ₹ 3000 on
Lakme cosmetics on 21.1.2020. Lakme 21.2.2020 to avail the services of eyecheck
cosmetics deals in various accessories and up with Eye7 hospital. Preeti redeems the
cosmetics for Ladies. The voucher may be voucher on 10.3.2020. In this case, TIME
redeemed for any items like nail polish, OF SUPPLY will be 21.2.2020, the date of
lipsticks, eye liner etc. She redeemed the issue of voucher since supply is
voucher on 25.2.2020. In this case, TOS will identifiable.
be date of redemption since supply is not
identifiable at the date of issue of voucher.
TIME OF SUPPLY= 25.02.2020
TIME OF SUPPLY FOR RESIDUAL CASES
SEC 12(5) / 13(5)
Where it is not possible to determine the time of supply under any of the
circumstances discussed, it shall be determined as:
Where periodical return has to be
filed • Due date for filing of such return
Any other case • Date on which GST is paid
TIME OF SUPPLY OF GOODS / SERVICES: VALUE ADDITION SEC.
12(6) / 13(6)
TIME OF SUPPLY OF GOODS / SERVICES:
VALUE ADDITION SEC. 12(6) / 13(6)
Example: M/s Kanishka supplies services to Mr. Gautam for ₹ 4, 70,000 on 25.11.2019 with
credit period of 1 month. The invoice specifies an interest charge of ₹ 3000 in case the
recipient fails to make the payment in specified time period. Mr. Gautam makes the payment
of ₹ 4, 70,000 on 31.12.2019. Further, He pays the charges for late payment: interest of ₹
3000 on 08.01.2020.
TIME OF SUPPLY in respect of Addition in value is 08.01.2020 i.e. Date on which
supplier receives such addition in value of ₹ 3000.
CHANGE IN RATE OF TAX IN RESPECT OF SUPPLY OF
GOODS OR SERVICES – SEC 14
Taxable supply
Date of issue of Date of receipt of
has been Time of supply Rate of tax
invoice payment
provided
1. Date of receipt
of Payment
2. Date of issue
After After New
Before of invoice
Change in whichever is
effective rate of earlier
tax Date of issue of
Before After Old
invoice
Date of receipt of
After Before Old
Payment
CHANGE IN RATE OF TAX IN RESPECT OF SUPPLY OF
GOODS OR SERVICES – SEC 14
Taxable supply
Date of issue of Date of receipt of
has been Time of supply Rate of tax
invoice payment
provided
Date of receipt of
Before After New
Payment
After 1. Date of receipt
Change in of Payment
effective rate of 2. Date of issue
Before Before Old
tax of invoice
whichever is
earlier
Date of issue of
After Before New
invoice
CHANGE IN RATE OF TAX IN RESPECT OF
SUPPLY OF GOODS OR SERVICES – SEC 14