50

CHAPTER

Time of Supply
3.1 Introduction
GST is payable on supply of goods or services. At which point of time liability to pay GST arises?

Provisions relating to ‘time of supply’ provide answer to all the questions that arise on the timing of the liability to pay
CGST and SGST/UTGST (intra-state supply) and IGST (inter-state supply) as time of supply fixes the point in time
when the liability to pay tax arises.

The CGST Act provides separate provisions for time of supply for goods and services vide sections 12 and 13 of CGST
Act. Section 14 provides for the method of determining the time of supply in case there is a change in rate of tax in
supply of goods or services.

The provisions relating to time of supply essentially push the tax collection event to the earliest possible time, so that,
Government can earn the tax revenue at the earliest possible time.

3.2 Time of Supply of Goods [Section 12]

I. “Time of Supply” (TOS) for Goods
1. Section 12 covers the determination of time of supply in the following situations:
● Supply of goods by supplier where supplier is liable to pay tax;
● Receipt of goods that are taxable under reverse charge;
● Supply of vouchers that can be used to pay for goods;
● Residual Cases;
● Addition to value of supply by way of interest or free or penalty for delayed payment.

2. The time of supply of goods where supplier is liable to pay GST (Forward charge) [Section 12(2) read with sub-
sections (1), (4) & (7) and Section 31] shall be :
(a) Date of issue of invoice (date of actual issue or last date when it should be issued u/s 31); or
(b) Date of receipt of payment (to the extent payment is received),
whichever is earlier.

3. Assessee supplying goods is not required to pay GST on advance payment received [NN 66/2017 – CT, w.e.f.
15.11.2017] :
(i) The registered person who did not opt for the composition levy u/s 10 of the CGST Act, has been notified as
the class of persons who shall pay GST on the outward supply of goods at the time of supply as specified in
section 12(2)(a) of the CGST Act [i.e. the Date of issue of invoice (date of actual issue or last date when it
should be issued u/s 31)], irrespective of the actual receipt of payment in respect of such supply.
However, this benefit is not available to the registered persons making supply of “specified actionable
claims” as defined u/s 2(102A). It means, in respect of supply of “specified actionable claims”, GST shall be
required to paid at the time of supply as specified in section 12(2)(a) or section 12(2)(b), whichever is earlier
[i.e. Date of issue of invoice (date of actual issue or last date when it should be issued u/s 31) or Date of
receipt of payment (to the extent payment is received), whichever is earlier.] In nut shell, GST will be
required to be paid on advances received in respect of supply of “specified actionable claims”. [Inserted by
NN 50/2023 – CT, w.e.f. 01.10.2023]
 Time of Supply 51

(ii) Further, in respect of such persons, same provision as discussed above shall apply in the situations attracting
the provisions of section 14 of the CGST Act (section 14 is discussed later in this chapter), and shall
accordingly furnish the details and GST returns and shall accordingly pay the GST.
4. Significance of ‘to the extent supply is covered by the invoice' : The TOS, as discussed above shall be only to the
extent of the amount covered in the invoice i.e., suppose, invoice is issued for part value, 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.
5. Time limit for issuance of invoice for supply of goods :
● As per section 31(1), the invoice needs to be issued either before or at the time of removal (where supply
involves movement of goods) of goods/delivery of goods/ making goods available to the recipient.
● In case of continuous supply of goods, the invoice should be issued before or at the time of issuance of
periodical statement/receipt of periodical payment [Section 31(4)]
● As per Sec. 2(32) of the CGST Act, 2017, “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 or other conduit, 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 notification, specify;
● In case of goods sent or taken on approval for sale or return, invoice should be issued before or at the time of
supply or 6 months from the date of removal, whichever is earlier [Section 31(7)].
Illustration 1 :
Mr. Yash, a manufacturer of printing machine located in Mumbai, has received an order to supply the machine at
Bangalore. The details of various events are:
1st July Received purchase order for the Machine worth Rs. 15,00,000/-
5th August Received a cheque towards an advance payment of Rs. 1,00,000/- and entry duly made in
thebooks of account of Mr.Yash
13th August Cheque of Rs. 1,00,000/- credited in the Bank Account of Mr. Yash
8th September The machine is delivered to customer
15th September Invoice of Rs. 15,00,000/- Raised
20th October Balance payment of Rs. 14,00,000/- received
Determine the time of supply(ies) in the above scenario assuming aggregate turnover during P.F.Y. was Rs. 5 crores.
Solution : As per Section 12(2)(a), the time of supply of goods for entire amount of Rs. 15,00,000/- is 8th September,
which is
the date on which the invoice should have been issued as per Section 31(1)(b). Further, receipt of advance of Rs. 1,00,000
is of no relevance in case of supply of goods.
Illustration 2 :
Gas is supplied by a pipeline. Monthly payments are made by the recipient as per contract on 5th of every next month.
Every quarter, invoice is issued by the supplier supported by a statement of goods dispatched and payment made, and
the recipient has to pay the differential amount, if any. The details of various events are:

5th August, 5th September and 5th October Payments of Rs. 2 lakhs made in each month
13th October Statement of accounts issued by supplier, with invoice for the quarter of
July-September
10th November Differential payment of Rs. 56,000/- received by supplier for the quarter
July-September as per statement of accounts.

Determine the time of supply.

Solution : As per section 31(4), in the case of continuous supply of goods, the invoice should be issued before or when
the statement of accounts is issued or each such payment is received. Hence, monthly invoice in respect of each Rs. 2
lakhs should have been issued on or before 5th of the next month.
 52 Indirect Taxation - Goods and Services Tax (GST) Authored by CA. Yashvant Mangal

Time of supply will be 5th August, 5th September and 5th October respectively for goods valued at Rs. 2 lakh each, as
the date of payment is earlier than the date of invoice. Time of supply will be 13th October for the goods valued
at56,000, as the date of invoice is earlier than the date of payment.
Illustration 3 :

Chiku Traders is a registered supplier of plastic goods. On 10th April, 2018, Chiku Traders received an order from
Neelu Traders for supply of a consignment of plastic goods. Chiku Traders gets the consignment ready by 15th April,
2018. The invoice for the consignment was issued the next day, 16th April, 2018. Neelu Traders collects the consignment
from the godown of Chiku Traders on 25th April, 2018 and hands over the cheque towards payment on the same date.
The said payment is entered in the books of accounts of Chiku Traders on 26th April, 2018 and amount is credited in
their bank account on 27th April, 2018.

Determine the time of supply of the plastic goods supplied by Chiku Traders to Neelu Traders as per the provisions of
CGST Act, 2017. [CA Final (New) Nov. 18 – Q.1 (b)](5 Marks)
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) of the CGST Act, 2017, i.e. date of issue of invoice or the last date on which
invoice ought to have been issued in terms of section 31(1).
As per section 31, the invoice in case of supply of goods needs to be issued either before or at the time of
removal/delivery of goods.

In this case, the invoice is issued before the removal of the goods and is thus, within the time limit prescribed under
section 31(1). Therefore, time of supply is the date of issue of invoice, which is 16th April, 2018.
9. The TOS in respect of the receipt of goods that are taxable under reverse charge [Section 12(3)] : The time of
supply of goods on which GST is payable on reverse charge basis under sub-sections (3) and (4) of section 9 of
CGST Act is determined in terms of section 12(3)(a), (b) and (c), as follows:
The time of supply for such goods will be the earliest of the following dates:
● Date on which the goods are received, or
● Date on which payment is recorded in the books of account of the entity that receives the goods, or the date
on which it is debited from the entity’s bank account, whichever is earlier, or
● 31st Day from the date of issue of invoice (or document by some other name in lieu of invoice) of supplier.
If it is not possible to determine the time of supply by using these parameters, then the time of supply will be the
date of entry of goods in the books of accounts of the recipient of supply.
Illustration 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 lapse on June 3)
May 12 Bridge & Co. receives the goods
May 30 Bridge & Co. makes payment
Solution : Here, 12th May 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 30 days from that date.)
Illustration 5 :
Determine the time of supply from the given information :
May 4 Supplier invoices goods taxable on reverse charge basis to Pillar & Co. (30 days from the date of
issuance of invoice lapse on June 3)
June 12 Pillar & Co. receives the goods, which were held up in transit
July 3 Payment made for the goods
 Time of Supply 53

Solution : Here, June 4, [i.e. 31st day from the date of supplier’s invoice], will be the time of supply. Being the earliest to
the three stipulated dates namely, receipt of goods, date of payment, and date immediately following 30 days from
issuance of invoice [Section 12(3)].
10. Vouchers [Section 12(4)] :
● Voucher means an instrument where there is an obligation to accept it as consideration or part consideration
for a supply of goods or services or both and where the goods or services or both to be supplied or the
identities of their potential suppliers are either indicated on the instrument itself or in related documentation,
including the terms and conditions of use of such instrument [Section 2(118)].
● As commonly understood, vouchers are instruments that can be exchanged as payment for goods and services
of the designated value. As per the definition, they are instruments that certain persons (potential suppliers)
are obliged to accept as consideration, part or full, for goods and/or services; the instrument or its related
documentation sets out the terms and conditions of use, the goods/services covered, and the identity of
potential suppliers of these.
● As per section 12(4), the time of supply of vouchers exchangeable for goods is -
- Date of issue of the voucher, if the supply that it covers is identifiable at that point, or
- Date of redemption of the voucher in other cases.
Examples of Time of Supply of Vouchers Exchangeable for Goods:

Any goods can be Supply is not identifiable Date of

Big Bazar Gift
purchased from the at the time of issue of the redemption of
Vouchers
Big Bazar voucher voucher

Only Gold
Jewellery can be Supply is identifiable at
Gold Jewellery Date of issue of
Voucher purchased from the the time of issue of the
voucher
Gold Jewellery voucher
voucher
Example : Acme Sales Limited sells food coupons to a company, which gives these to its employees as part ofthe
agreed perquisites. The coupons can be redeemed for the purchase of any item of food/provisions in the outlets
that are a part of the program.
As the supply against which the coupon will be redeemed is not known on the date of the sale coupon, the time of
supply of the coupon will be the date on which the employee redeems it against food/provision items of his choice.
Example : With each purchase of a large pizza during the Christmas week from Perfect pizza, one can buy a
voucher for Rs. 200 which will be redeemable till 5 Jan. for a small pizza.
As the supply against which the voucher will be redeemed is known on the date of the sale, the time of supply is
the date of issue of the voucher.
11. Residual Case [Section 12(5)] : If the situation is not covered by any of the provisions discussed above, the time of
supply shall be determined in the following manner:
● Due date of filing of the periodical return, or
● In any other case, date on which GST is paid.
Time of Supply of Goods under Residual Case:

Where a periodical return is to be filed Date on which return is required to be filed

Other Cases Date on which GST is paid

Example : Investigation reveals illegal 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
 54 Indirect Taxation - Goods and Services Tax (GST) Authored by CA. Yashvant Mangal

tax during the investigation, to close the case. The time of supply will be the date on which tax is paid, as being
unregistered, the supplier is not required to file periodical returns.
12. The TOS in respect of enhancement in value on account of Interest/late fee etc. for delayed payment of
consideration [Section 12(6)]: Commercially, all the contract of supplies stipulate payment of interest/late fee/
penalty etc. for payment of consideration beyond the agreed time period. Such interest, etc. is includible in value of
taxable supply [Refer Section 15(2)(d) - Value of supply]. So, the question arises as to when the liability to pay GST
would arise in such cases of addition in value.
Section 12(6) prescribes that time of supply in case of addition in value by way of interest/late fee/penalty for
delayed payment of consideration for goods is the date on which the supplier receives such addition in value.
Illustration 6 :
Mr. P supplied goods for the value of Rs. 10,000 to its customer Miss Prem on 01.01.2018 on the condition that payment
for the same will be made within a week. However, Miss Prem made payment for the said goods on 02.02.2018 and thus
paid interest amounting to Rs. 500. 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) of CGST Act, 2017, the time of supply with regard to an addition in value on account of
interest, late fee or penalty or delayed payment of consideration shall be 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. 02.02.2018. Further, Mr. P is required to make payment on or before 20th of March, 2018.

The provisions relating to time of supply of goods as contained in section 12 are summarized in the diagram
give below:

Time of supply of goods under Time of supply of goods under Time of supply of vouchers
forward charge reverse charge exchangeable for goods

Date of issue/ due date of Date of receipt of goods Date of issue of voucher, if the
issue of tax invoice under supply is identifiable at that point
section 31
Date of recording the payment
in the books of accounts of the Date of redemption of voucher, in
No GST on advance received recipient of goods other cases
for supply of goods by
registered person (Excluding
Composition suppliers)
Date on which payment is debited
from the bank account of the
recipient of goods

31st day from supplier’s invoice

Whichever is earliest

If above events are unascertainable Time of supply = Date

of entry of goods in the books of accounts of the recipient
of goods
 Time of Supply 55

Due date of periodical return

Residual Case (if all the above do Time of Supply OR
not work for a situation) In any other case, the date on which
tax is paid
Addition in value by way of
interest, late fee/penalty for Time of Supply Date on which the supplier receives
delayed payment of consideration
such addition in value
for goods

3.3 Time of Supply of Services [Section 13]

I. Time of Supply (TOS) for Services

1. Section 13 stipulates how to determine time of supply in the following situations:
● Supply of service on which the supplier is liable to pay tax;
● Receipt of service that is taxable under reverse charge basis;
● Supply of vouchers that can be used to pay for services;
● Residual cases;
● Addition to value of supply by way of interest or fee or penalty for delayed payment.
The time of Supply of service where supplier is liable to pay GST (Forward Charge) [Section 13(2) read with
sub-section (2), (5) & (6) of section 31 and rule 47 of CGST Rules] shall be determined as under:

Whether the invoice is issued in time as per section 31

Yes No

(a) Date of Invoice or date of receipt of (b) Date of provision of service or date of
payment (to the extent the payment covers the receipt of payment (to the extent the payment
services), whichever is earlier covers the services), whichever is earlier

(c) In a case where provisions of clause (a) or (b) do not apply, then, the time of supply will be the date on which
the recipient of service shows receipt of service in his books of account.
Important Points :
(i) Analysis of “to the extent the payment covers the services” : Suppose, 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 of the part payment.
(ii) Meaning of “date of receipt of payment” : “Date of receipt of payment” in the above situation refers to the date
on which the payment is recorded in the books of account of the entity (supplier of service) that receives the
payment, or the date on which the payment is credited to the entity’s bank account, whichever is earlier.
(iii) Time limit for issuance of invoice for supply of services
● As per section 31 read with rule 47 of CGST Rules, the tax invoice needs to be issued either before or after the
provision of service but within 30 days (45 days in case of insurance companies/banking companies/
financial institutions including NBFCs) from the date of supply of service.
● In case of cessation of supply of services before completion of supply, the invoice (to the extent of supply
made before such cessation) should be issued at the time when the supply ceases.
 56 Indirect Taxation - Goods and Services Tax (GST) Authored by CA. Yashvant Mangal

● In case of continuous supply of services, the invoice should be issued either (i) on/ before the due date of
payment or (ii) before/ at the time when the supplier of service receives the payment (iii) on/ before the date
of completion of the event when the payment is linked to completion of an event.
● As per Sec. 2(33) of the CGST Act, 2017, “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 three 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;
● In case of insurance companies/ banking companies/ financial institutions including NBFCs/ telecom
companies/ notified supplier of services making taxable supplies between distinct persons as specified in
section 25 (like inter-branch transaction), invoice may be issued before or at the time of recording such supply
in the books of account or before the expiry of the quarter during which the supply was made.
Illustration 7 : The time of liability to pay GST is independent of the time of supply of goods/ services. Discuss the
correctness of the statement?
Solution : The said statement is not correct. Liability to pay arises at the time of supply of goods as explained in Section
12 and at the time of supply of services as explained in Section13 of CGST Act.
Illustration8 : [Section 13(2)]
Assuming that it is a case where, as per Section 31(2) of the CGST Act, 2017, the time limit for issue of invoice is 30 days:

Date of Provision of Date of Issue of Date of Receipt of

Sr. No. Time of Supply
Service Invoice Payment
1 30.04.2018 20.05.2018 25.05.2018 20.05.2018
2 30.04.2018 12.06.2018 25.05.2018 30.04.2018
3 12.04.2018 06.05.2018 25.04.2018 25.04.2018
4 12.04.2018 16.05.2018 25.04.2018 12.04.2018
5 05.05.2018 15.05.2018 25.04.2018 25.04.2018
6 27.05.2018 28.05.2018 25.04.2018 25.04.2018
(100000) (60000) (60000)
06.06.2018 28.05.2018
(40000) (40000)
7 27.05.2018 06.06.2018 Bad Debt 06.06.2018
(100000) (100000)

Illustration 9 : Determine the time of supply from the following particulars:

6th May Booking of convention hall, sum agreed Rs. 15000, advance of Rs. 3000 received
15th September Function held in convention hall
27th October Invoice issued for Rs. 15000, indicating balance of Rs. 12000 Payable
3rd November Balance payment of Rs. 12000 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 service is the date of provision of
service or receipt of payment, whichever is earlier.
 Time of Supply 57

Therefore, the time of supply of service to the extent of Rs. 3,000 is 6th May as the date of payment of Rs. 3,000 is earlier
than the date of provision of service. The time of supply of service to the extent of the balance Rs. 12,000 is 15 th
September which is the date of provision of service.
TIME OF SUPPLY OF SERVICES UNDER FORWARD CHARGE

Is invoice issued within the time specified u/s 31 ?

Yes No

Time of supply: Time of supply:

 Date of issue of invoice  Date of provision of Service
 Date on which payment is recorded in the  Date on which payment is recorded in the
books of account of supplier books of account of supplier
 Date on which the payment is credited to  Date on which the payment is credited to
the supplier's bank account the supplier's bank account
(Whichever is earlier) (Whichever is earlier)

If time of supply cannot be determined by Date of receipt of services in the books of

both the above methods, then, TOS? account of the recipient

Illustration 10 : Investigation shows that ABC & Co carried out service of cleaning and repairs of tanks in an apartment
complex, for which the Apartment Owners’ Association showed a payment in cash on 4 th April to them against work of
this description. The dates of the work are not clear from the records of ABC & Co. ABC & Co have not issued invoice or
entered the payment in their books of account.
Solution : The time of supply cannot be determined vide the provisions of clauses (a) and (b) of section 13(2) as neither
the invoice has been issued nor the date of provision of service is available as also the date of receipt of payment in the
books of the supplier is also not available. Therefore, the time of supply will be determined vide clause (c) of section
13(2) i.e., the date on which the recipient of service shows receipt of the service in his books of account.
Thus, time of supply will be 4th April, the date on which the Apartment Owners’ Association records the receipt of
service in its books of account.
(iv) Excess payment upto Rs. 1,000 - Option of taking invoice date as time of supply: In terms of the proviso to sub-
section (2) of section 13, if Advance payment received is upto Rs. 1,000, the supplier can choose to take date of
invoice issued with respect to such excess amount as the time of supply of services of such excess value.
Example : ABC Pvt. Ltd. received Rs. 11,000 against an invoice of Rs. 10,500. The excess amount of Rs. 500 can be
adjusted against the next invoice. The company has the option to take the date of the next invoice as the time of
supply of service in relation to the amount of Rs. 500 received in excess against the earlier invoice.
3. The TOS in respect of the receipt of services that are taxable under reverse charge [Section 13(3)] : The time of
supply of service on which GST is payable on reverse charge basis (except on services received from associated
enterprises located outside India) under sub-sections (3) and (4) of section 9 is determined in terms of section
13(3)(a) and (b) as follows:
The time of supply for such service shall be :
 Date of payment, or
 61st day from the issue of invoice (or any other document in lieu of invoice) by the supplier,
whichever is earlier.
If it is not possible to determine the time of supply by using these parameters, then, the time of supply will be the
date of entry of the service in the books of account of the recipient of supply.
Important Notes :
 58 Indirect Taxation - Goods and Services Tax (GST) Authored by CA. Yashvant Mangal

(i) Import of services between associated enterprises: In the case of service received from an associated
enterprise located outside India, the time of supply will be the date of payment for the service, or the date of
entry of the service in the books of account of the recipient, whichever is earlier.
(ii) Meaning of “Date of payment”: “Date of payment” in the above situation refers to the date on which the
payment is recorded in the books of account of the entity that receives the service (recipient of service), or the
date on which the payment is debited from the entity’s bank account, whichever is earlier.
Illustration 11: Determine the time of supply from the given information. (Assuming that service being supplied is
taxable under reverse charge)
May 4 The supplier of service issues invoice for service provided. There is a dispute about amount payable,
and payment is delayed.
August 21 Payment made to the supplier of service
Solution: Here, July 4 will be the time of supply, being the earliest of the two stipulated dates namely, date of payment
and date immediately following 60 days since issue of invoice.
Illustration 12: Determine the time of supply from the given information.
May 4 A German company issues e-mail informing its associated company ABC Ltd. of the cost of technical
services provided to it.
July 2 ABC Ltd transfers the amount to the account of the German company
Solution : As there is no prior entry of the amount in the books of account of ABC Ltd., July 2 will be the time of supply,
being the date of payment in terms of second proviso to section 13(3).
4. Vouchers [Section 13(4)]: The term voucher has already been explained under the Heading “Time of Supply of
Goods”. 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.
Example : Best Hospitality Services enters into agreement with Drive Marketing Ltd by which Drive Marketing
Ltd. markets Best Hospitality Services’ hotel rooms and sells coupons/vouchers redeemable for a discount against
stay in the hotel.
As the supply against which the voucher will be redeemed is identifiable, the time of supply of the voucher will be
its date of issue.
5. Residual case [Section 13(5)]: 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.
6. Enhancement of value on account of interest/late fee etc. for delayed payment of consideration [Section 13(6)]:
The provisions for time of supply in case of addition in value by way of interest, late fee/penalty for delayed
payment of consideration are same for goods and services.
Section 13(6) prescribes that 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.
 Time of Supply 59

Time of Supply of Service (Section 13)

Time of supply of services Time of supply of services under Time of supply of services
under forward charge when forward charge when the invoice under reverse charge
the invoice is issued within is not issued within the time
the time specified u/s 31 specified u/s 31
Date of recording the payment
in the books of accounts of the
Date of issue of tax invoice Date of provision of service recipient of services

Date of recording the Date of recording the Date on which payment is

payment in the books of payment in the books of debited from the bank account
accounts of the supplier accounts of the supplier of the recipient of services

Date on which payment is 61st day from the date

Date on which payment
credited in the bank account of supplier’s invoice
is credited in the bank
of the supplier account of the supplier
Whichever is earlier
Whichever is earlier

If the above events are

If the above events are UNASCERTAINABLE, Time of UNASCERTAINABLE, Time of Supply =
Supply = Date of receipt of services in the books of account Date of entry of services in the books of
of the recipient of supply account of the recipient of supply

Time of supply of vouchers Date of issue of voucher, if the supply is Date of redemption of
exchangeable for services identifiable at that point voucher in other cases

Time of supply of Residual cases (If all the above Due date of filling of periodical return; or in any other
do not work for a situation) case, the date on which tax is paid

Time of supply of addition in value by way of interest, late Date on which the supplier receives such
fee/penalty for delayed payment of Consideration for addition in value
services

7. Special procedure for liability to pay tax by registered person supplying service by way of construction against
transfer of development right and vice versa [NN. 06/2019-Central Tax (Rate), w.e.f. 01.04.2019][Same provisions
applicable under IGST also]
1. The Central Government, on the recommendations of the Council, has notified the following classes of
registered persons, namely:-
(i) a promoter who receives development rights or Floor Space Index (FSI) (including additional FSI) on or
after 1st April, 2019 for construction of a project against consideration payable or paid by him, wholly or
partly, in the form of construction service of commercial or residential apartments in the project or in any
other form including in cash;
 60 Indirect Taxation - Goods and Services Tax (GST) Authored by CA. Yashvant Mangal

(ii) a promoter, who receives long term lease of land on or after 1st April, 2019 for construction of residential
apartments in a project against consideration payable or paid by him, in the form of upfront amount
(called as premium, salami, cost, price, development charges or by any other name),
as the registered persons who shall pay GST on, -

(a) the consideration paid by him in the form of construction service of commercial or residential apartments
in the project, for supply of development rights or FSI (including additional FSI);
(b) the monetary consideration paid by him, for supply of development rights or FSI (including additional
FSI) relatable to construction of residential apartments in project;
(c) the upfront amount (called as premium, salami, cost, price, development charges or by any other name)
paid by him for long term lease of land relatable to construction of residential apartments in the project;
and
(d) the supply of construction service by him against consideration in the form of development rights or
FSI(including additional FSI), -
in a tax period not later than the tax period in which the date of issuance of the completion certificate for the
project, where required, by the competent authority, or the date of its first occupation, whichever is earlier,
falls.
2. Explanation: For the purpose of this notification,-
(i) The term “apartment”, “promoter”, “Real Estate Project (REP)” shall have the same meaning as assigned
to it in section 2 of the Real Estate (Regulation and Development) Act, 2016;
(ii) the term “project” shall mean a Real Estate Project (REP) or a Residential Real Estate Project (RREP);
(iii) the term “Residential Real Estate Project (RREP)” shall mean a REP in which the carpet area of the
commercial apartments is not more than 15% of the total carpet area of all the apartments in the REP.
(iv) the term “floor space index (FSI)” shall mean the ratio of a building’s total floor area (gross floor area) to
the size of the piece of land upon which it is built.
3. Note: Tax on services covered by sub-para (i) and (ii) of paragraph 1 above is required to be paid under
reverse charge basis in accordance with NN. 13/2017 - CT (R), dated 28.06.2017, as amended.
Illustration 13 : [Refer Sec. 13(2) and Sec. 2(33)] [Continuous Supply of Service]
Mr. Bhavesh entered into a contract with Mr. Amit for construction of a new building to be used primarily for the
purpose of commerce or industry for a total consideration of Rs. 500 lakh on October 1, 2017. The said services fall
within the purview of ‘works contract services’. The initial booking amount of Rs. 100 lakh was billed and received on
the date of contract itself. It was further agreed that Rs. 170 lakh, Rs. 140 lakh and Rs. 90 lakh respectively would be
received on completion of 50%, 75% and 100% of the construction work of the building. Determine the time of supply in
respect of each of following stages of completion with the help of relevant details furnished as under :

Stage % of Completion Date of Completion Date of Issuance Date of Payment of

of the Building of Invoice Stipulated Amount
I 50% November 20, 2017 October 25, 2017 January 25, 2018
II 75% December 30, 2017 February 25, 2018 January 30, 2018
III 100% February 25, 2018 March 03, 2018 March 01, 2018

A certificate from Chartered Engineer registered with Institution of Engineers has been obtained for each stage of
completion of the building. Give brief reasons for your answer.
Solution: Refer Sec. 13(2) and Sec. 2(33) of CGST Act, 2017

Stage Amount
Time of Supply (TOS) with Reason
(in lakhs)
 Time of Supply 61

Initial 100 01.10.2017, in case of receipt in advance, TOS shall be the date of receipt of advance.
Amount
I 170 25.10.2017, since, invoice is issued on or before the date of completion of the event linked
to the payment, therefore, the TOS shall be date of issue of invoice or receipt of payment,
whichever is earlier.
II 140 30.12.2017, since, invoice is issued after the date of completion of the event linked to the
payment, therefore, the TOS shall be date of completion of service or receipt of payment,
whichever is earlier.
III 90 25.02.2018, since, invoice is issued after the date of completion of the event linked to the
payment, therefore, the TOS shall be date of completion of service or receipt of payment,
whichever is earlier.

Illustration 14 : [Section 13(2)]

On the basis of following information, determine the ‘Time of Supply’:
(1) Commencement of providing of service on 05-08-2017
(2) Completion of service on 10-10-2017
(3) Invoice issued on 20-10-2017
(4) Payment received by cheque and entered in the books on 15-10-2017
(5) Amount credited in Bank A/c on 25-10-2017
(6) Service became taxable for the first time on 01-07-2017

Solution : Refer Section 13(2) :

● Date of payment shall be the earlier of date of entry in BoA or Date of credit in Bank A/c (i.e. 15-10-2017).
● “Date of Commencement of Providing of Service” and “Service becoming taxable for the first time on 01-07-2017”
are of no relevance in this case for determination of Time of Supply (TOS).
● Since, invoice is issued within 30 days of completion of service, therefore, as per Section 13(2), the TOS shall be the
Date of issue of invoice or date of payment, whichever is earlier. [i.e. 20-10-2017 or 15-10-2017, whichever is earlier.]
● Therefore, TOS shall be 15-10-2017.
Illustration 15 : [Section 13(3) RCM Services]
Service Imported on 15.10.2017
Invoice issued on 25.11.2017
Payment made to service provider on 10.12.2017

Solution : TOS = 10.12.2017

Illustration 16: [Section 13(3) RCM Services]
Service Imported by ABC Pvt. Ltd. On 15.10.2017
Invoice issued on 15.10.2017
Payment made to service provider on 20.03.2018

Solution : The TOS in this case shall be 61st day from the date of issue of invoice i.e. 15.12.2017. Because, in this case,
payment is not made within a period of 60 days from the date of invoice.
 62 Indirect Taxation - Goods and Services Tax (GST) Authored by CA. Yashvant Mangal

3.4 Sec.14 – Change in Rate of Tax in Respect of Supply of Goods or

Services
Statutory Provisions

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, –
(i) 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
(ii) where the invoice has been issued prior to the change in rate of tax but payment received after the change in
rate of tax, the time of supply shall be the date of issue of invoice; or
(iii) 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,–
(i) 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
(ii) 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
(iii) 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.

ANALYTICAL VIEW OF THE TOPIC

1. Tabular Presentation of Section 14 :

Goods / Services Invoice Issued Payment Received Time of Supply

Supplied

Yes No No Date of issue of invoice

(Before change in rate) (After change in rate) (After change in rate) or Receipt of payment,
whichever is earlier
Before
change in Yes Yes No Date of issue of invoice

Rate of tax (Before change in rate) (Before change in rate) (After change in rate)

Yes No Yes Date of payment

(Before change in rate) (After change in rate) (Before change in rate)

Goods / Services Invoice Issued Payment Received Time of Supply

Supplied
After Yes No No Date of issue of invoice
 Time of Supply 63

change in (After change in rate) (Before change in rate) (Before change in rate) or Receipt of payment,
Rate of tax whichever is earlier
Yes Yes No Date of issue of invoice
(After change in rate) (After change in rate) (Before change in rate)
Yes No Yes Date of payment
(After change in rate) (Before change in rate) (After change in rate)

2. Date of Payment: For the purposes of Time of Supply, the “Date of Payment” means the date on which the
payment is entered in the books of account or the date on which the payment is credited to the bank account,
whichever is earlier.

But, if the credit in the bank account is after 4 working days from the date of change in the rate of tax, then, the date
of receipt of payment shall be the date of credit in the bank account.

Illustration 17: Date of Payment in Case of Change in Rate of Goods and Services Tax
Date of issue of invoice 15.03.2018
Date of entry in the books of accounts for cheque received 25.03.2018
Date of credit in the Bank A/c of cheque deposited 08.04.2018
Change in rate of goods & service tax 01.04.2018
What will be the date of payment ?
Solution :
In this case, since, the rate of goods & service tax is changed on 01.04.2018 and the credit in the Bank A/c is after 4
working days from the change in rate of goods & service tax [i.e. after (01.04.2018 + 4 working days)], therefore, the date
of payment shall be the date of credit in the Bank A/c. Thus, the date of payment, in this case, will be 08.04.2018.
Illustration 18 :
What would be your answer in the above illustration, if the date of credit in the Bank A/c would had been 03.04.2018 ?
Solution :
In such case, the date of payment would be “Date of Entry in BoA, or Date of Credit in Bank A/c, whichever is earlier”
i.e. 25.03.2018.
Illustration 19 : [Section 14]
Service completion = 12.08.2017
Invoice issued = 03.09.2017
Amount received = 05.09.2017
Rate of GST upto 31.08.2017 = 12%
Rate of GST w.e.f. 01.09.2017 = 18%
Solution :
The TOS as per Section 14 = 03.09.2017
Rate of GST as per Section 14 = 18%
So, liability on 03.09.2017 will have to be paid @ 18%.
Illustration 20 : [Section 14]
YAM & Co., a Chartered Accountants firm, provided audit services to one of its clients. The service was completed on
15.09.2017. However, the invoice for the same was raised on 15.11.2017 whereas the payment was received on
25.09.2017. The GST Rate was 12% till 30.09.2017. However, from 01.10.2017, the GST Rate is increased to 18%.
Determine the Time of Supply and the rate applicable.
 64 Indirect Taxation - Goods and Services Tax (GST) Authored by CA. Yashvant Mangal

Solution :
Law Point : As per Section 14 of the CGST Act, 2017, whenever there is a change of rate of tax and the service is
completed before such change and payment is also received prior to such change, then the TOS shall be the date of
payment.
Analysis of the Facts with Law:
1. Here, the CA firm completed the audit services on 15.09.2017 and payment is received on 25.09.2017, which are
before the date of change on 01.10.2017.
2. Hence, the Time of Supply shall be the date of payment (25.09.2017).
Conclusion: The Time of Supply shall be the date of payment (25.09.2017). Therefore, applicable rate of GST = 12%.
Illustration 21 :

I buy a set of modular furniture from a retail store. Invoice is issued to me and I make the payment. The furniture is to
be delivered to me later in the week when a technician is available to assemble and install it. The next day the rate of tax
applicable to modular furniture is revised upward, and the store sends me a supplementary invoice with the delivery
note accompanying the furniture to collect the differential amount of tax. Is this correct on store’s part?
[MTP – Q. 3(a) (4Marks)]
Solution :
No, the store is not correct in issuing supplementary invoice with revised rate of tax. The revised rate of tax is not
applicable to the transaction, as the issuance of invoice as well as receipt of payment occurred before the supply.
Therefore, in terms of section 14(b)(ii), the time of supply is earlier of the two events namely, issuance of invoice or
receipt of payment, both of which are before the change in rate of tax, and thus, the old rate of tax remains applicable.

“Koi tumhe tab tak nahi hara sakta,

jab tak tum khud se na haar jao”