Time of Supply Under GST India

Time of Supply Rules for Goods & Services

What is Time of Supply Under GST?

In the Indian Goods and Services Tax (GST) framework, Time of Supply (TOS) is one of the most fundamental concepts that determines when GST liability arises. Simply put, Time of Supply is the point in time at which a supply of goods or services is considered to have taken place. This is critical because it dictates when a taxpayer must pay GST to the government.

Under the CGST Act, 2017 (as amended up to the Finance Act 2025), Time of Supply provisions are codified under Sections 12 to 14. These provisions clearly define the TOS for goods, services, vouchers, residual cases, and supplies under reverse charge mechanism (RCM), ensuring that there is no ambiguity in tax liability timelines.

Why Does Time of Supply Matter?

Time of Supply determines: (1) The tax period in which GST must be declared and paid, (2) The due date for issuing an invoice, (3) The eligibility period for availing Input Tax Credit (ITC), and (4) Applicable GST rate when rates change mid-year.

Legal Framework: Sections 12, 13 & 14 of the CGST Act

The Time of Supply is governed by three key sections of the Central Goods and Services Tax (CGST) Act, 2017, which apply uniformly across all states through their respective SGST Acts:

Section 12 – Time of Supply of Goods
Section 13 – Time of Supply of Services
Section 14 – Change in Rate of Tax in Respect of Supply of Goods or Services

Time of Supply for Goods (Section 12, CGST Act)

Section 12 of the CGST Act deals exclusively with goods — whether sold physically, through e-commerce, on instalment basis, or under forward/reverse charge.

(A) Under Forward Charge Mechanism (FCM)

When the supplier himself is liable to pay GST (Forward Charge), the Time of Supply for goods is the EARLIEST of the following three dates:

Date of issue of Invoice (or the last date on which the invoice should have been issued under Section 31)
Date of Receipt of Payment (i.e., the date of entry in books of accounts or date of credit in bank account, whichever is earlier)
Date of Delivery / Date of making the goods available to the recipient

Practical Illustration (FCM — Goods):

ABC Pvt. Ltd. (Delhi) supplies furniture to XYZ Ltd. (Mumbai). Goods dispatched on: 5th March 2026 Invoice issued on: 10th March 2026 Payment received on: 20th March 2026 Time of Supply = 5th March 2026 (earliest = date of delivery)

(B) Under Reverse Charge Mechanism (RCM) — Goods

When the recipient is liable to pay GST under RCM, the Time of Supply for goods is the EARLIEST of:

Date of Receipt of Goods
Date of Payment as per books of accounts or bank account credit (whichever is earlier)
Date immediately following 30 days from the date of Invoice issued by the supplier

Practical Illustration (RCM — Goods):

A registered dealer receives raw cotton (covered under RCM) from an unregistered farmer. Invoice Date: 1st April 2026 Receipt of Goods: 5th April 2026 Payment Date: 20th April 2026 30 days from Invoice: 1st May 2026 Time of Supply = 5th April 2026 (earliest of above)

Time of Supply for Services (Section 13, CGST Act)

Section 13 governs the Time of Supply for services. Unlike goods, services are intangible, and delivery cannot be pinpointed to a physical date. Hence the rules under Section 13 are slightly different.

(A) Under Forward Charge Mechanism (FCM) — Services

The Time of Supply for services under Forward Charge is the EARLIEST of:

Date of Issue of Invoice — if invoice is issued within the prescribed period (i.e., within 30 days from date of supply of service; 45 days for banks and insurance companies)
Date of Receipt of Payment — date of entry in books or date of credit in bank, whichever is earlier
Date of Completion of Service — when no invoice is raised within the prescribed time

Practical Illustration (FCM — Services):

CA Firm ‘M/s Sharma & Associates’ completes audit services for a client on 10th February 2026. Invoice issued: 5th March 2026 (within 30 days) Advance received: 1st February 2026 Time of Supply = 1st February 2026 (advance payment is earliest)

(B) Under Reverse Charge Mechanism (RCM) — Services

When a recipient has to pay GST on services under RCM, the Time of Supply is the EARLIEST of:

Date of Payment (as per books/bank)
Date immediately following 60 days from the date of invoice issued by the supplier

Key Point for RCM Services:

If neither of the above can be determined, the Time of Supply = Date of Entry in the books of accounts of the recipient.

Practical Illustration (RCM — Services):

A company avails legal advisory services from a foreign law firm (import of services). Invoice date from foreign supplier: 1st January 2026 60 days from invoice: 2nd March 2026 Payment made: 25th February 2026 Time of Supply = 25th February 2026 (earliest)

Time of Supply for Continuous Supply of Goods & Services

Continuous Supply of Goods

A continuous supply of goods means a supply of goods which is provided, or agreed to be provided, continuously or on a recurrent basis. Examples include gas pipelines, electricity distribution, etc.

For continuous supply of goods:

Where successive statements of accounts or successive payments are involved, the Time of Supply shall be the date of expiry of the period to which each statement or payment relates.
In all other cases, it is the date of issue of invoice or receipt of payment, whichever is earlier.

Continuous Supply of Services

Continuous supply of services means a supply of services which is provided, or agreed to be provided, continuously or on a recurrent basis, under a contract, for a period exceeding three months with periodic payment obligations. Examples: telecom services, internet services, subscription-based services, etc.

Time of Supply for continuous supply of services:

Where the due date of payment is ascertainable from the contract — it is the due date of payment
Where the due date cannot be determined — it is the date of payment
Where the payment is linked to the completion of an event — it is the date of completion of that event

Time of Supply for Vouchers

Vouchers are instruments that entitle the holder to receive goods or services, or to receive a discount on purchases. Under GST, the Time of Supply for vouchers is:

Type of Voucher	Time of Supply
Single-purpose voucher (SPV)	Date of issue of the voucher (supply is known at issuance)
Multi-purpose voucher (MPV)	Date of redemption of the voucher (supply is not known at issuance)

A Single-Purpose Voucher (SPV) is one where the supply of goods/services to which the voucher relates, and the place of supply, are known at the time of issue (e.g., a voucher only for a specific restaurant). A Multi-Purpose Voucher (MPV) is one that can be used across multiple types of goods or services (e.g., a general gift card).

Time of Supply in Residual / Other Cases

When the Time of Supply cannot be determined under any of the above methods, Section 12(5) and Section 13(5) provide that the Time of Supply shall be:

Periodically filed returns — the date on which the return relating to such period is to be filed
In any other case — date on which GST is paid

Time of Supply When Tax Rates Change (Section 14)

Section 14 of the CGST Act deals with situations where the rate of tax changes between the time a contract is made and when the supply is actually completed. The following matrix applies:

Scenario	Invoice/Payment Sequence	Applicable Rate
Supply before rate change	Invoice before & Payment before rate change	Old Rate
Supply before rate change	Invoice before but Payment after rate change	Old Rate
Supply before rate change	Invoice after but Payment before rate change	New Rate
Supply after rate change	Invoice before & Payment before rate change	New Rate
Supply after rate change	Invoice after but Payment before rate change	Old Rate
Supply after rate change	Invoice before & Payment after rate change	Old Rate

Important Note:

For the above table, ‘Supply’ refers to date of removal (for goods) or date of completion of service. ‘Rate change’ means the date when the new notification amending GST rate comes into effect.

Time of Supply for Advance Payments

Under GST, receipt of advance payment creates a tax point. However, the CBIC has granted several exemptions and clarifications over the years. As of 2026 (post Finance Act 2025 amendments):

For Goods — GST is payable on advance received. The TOS is the date of receipt of advance. The supplier must issue a Receipt Voucher at the time of receiving the advance.
For Services — GST is payable on advance received. The TOS is the date of receipt of advance.
For Registered persons with turnover up to Rs. 1.5 Crore (Goods only) — No GST on advance; TOS shifts to the date of invoice or supply, whichever is earlier (per CGST Notification 66/2017-CT, continued in 2026).

Advance Payment Example (Services):

A software company receives Rs. 5,00,000 advance on 15th January 2026 for a project deliverable in April 2026. GST applicable on Rs. 5,00,000 @ 18% = Rs. 90,000 payable in January 2026 tax period. Upon final invoice in April 2026, adjustment will be made for the advance already taxed.

Time of Supply in Special & Notified Situations

1. Import of Services (Self-Invoice under RCM)

When services are imported from outside India and no invoice is received within 60 days, the TOS is the date of entry in the books of accounts of the recipient. The recipient must issue a self-invoice under Section 31(3)(f) of the CGST Act.

2. Supply by E-Commerce Operators (Section 52 — TCS)

Where an e-commerce operator is required to collect Tax at Source (TCS), the Time of Supply for the actual supplier is the date of credit of such amount to the supplier by the e-commerce operator.

3. Works Contract Services

For works contract services (e.g., construction contracts), the Time of Supply is determined based on the contract terms — typically linked to milestones/stage payments. Each progressive billing date creates a separate TOS.

4. Employee-Related Perquisites

Certain perquisites provided to employees (taxable ones) — the Time of Supply is determined as per Section 13, treating the employer as the service provider.

5. Deemed Supply (Schedule I Transactions)

For supplies without consideration that are deemed supplies under Schedule I (e.g., supply between related persons, disposal of business assets), the Time of Supply is determined as per the rules applicable to goods or services accordingly.

Time of Supply and Its Impact on Input Tax Credit (ITC)

The Time of Supply has a direct bearing on ITC eligibility and claims. Under Section 16(4) of the CGST Act (as amended by the Finance Act 2022, applicable from 1st April 2022 and reaffirmed for 2026):

ITC can be claimed up to the earlier of: (a) 30th November of the year following the financial year to which the invoice pertains, or (b) the date of filing the Annual Return (GSTR-9).
If the TOS falls in a particular tax period, the supplier must report it in that period’s GSTR-1. The recipient can claim ITC only after the same is reflected in GSTR-2B.
Delayed invoicing or incorrect TOS reporting may result in ITC mismatch and notices from the GST department.

Critical 2026 Update:

As per Finance Act 2025 (effective 2026), GSTN has enhanced auto-population of ITC in GSTR-3B based on GSTR-2B. Taxpayers must ensure TOS is correctly declared to avoid auto-reversal of ITC during AI-based scrutiny by the GST portal.

Prescribed Time Limits for Issuing GST Invoices

The time limit within which a supplier must issue an invoice is directly linked to the Time of Supply concept. The rules under Section 31 are:

Type of Supply	Invoice Deadline	Remarks
Movable Goods (General)	At time of removal/delivery	Section 31(1)(a)
Immovable Property (Goods)	At time of delivery	Section 31(1)(b)
General Services	Within 30 days of supply	Section 31(2)(a)
Banking / NBFC / Insurance Services	Within 45 days of supply	Section 31(2)(b) — Special Category

Common Mistakes in Determining Time of Supply — And How to Avoid Them

Confusing Invoice Date with Supply Date — Always check which of the three dates (invoice, payment, supply) is earliest.
Treating advance as non-taxable for services — Advances received for services attract GST on the date of receipt.
Ignoring 30-day/60-day RCM rule — Failure to self-assess and pay GST under RCM on time can attract 18% interest per annum.
Wrong period GSTR-1 reporting — Filing in wrong tax period due to incorrect TOS leads to mismatches in GSTR-2B of recipients.
Overlooking TOS for imported services — Many businesses miss GST on import of services from foreign consultants.
Not issuing Receipt Voucher for advance — A Receipt Voucher must be issued when advance is received for supply of goods/services.

Penalties & Interest for Incorrect Time of Supply Declaration

Errors in determining or reporting Time of Supply can attract:

Interest under Section 50 of CGST Act — 18% per annum on the delayed tax payment
Late fee under Section 47 — Rs. 50 per day (Rs. 20 per day for NIL returns) up to Rs. 5,000 per return
Penalty under Section 73/74 — Up to 100% of tax due in cases of fraud or wilful misstatement
Demand and recovery proceedings — GST authorities can issue SCN (Show Cause Notice) and demand tax with interest and penalty for incorrect TOS reporting

CBIC Circular Update 2026:

CBIC through Instruction No. 01/2026-GST has directed field officers to focus on TOS-related scrutiny during audits and assessments. Proper documentation of invoice dates, payment receipts, and delivery challans is essential.

Practical Tips for GST Compliance on Time of Supply

Maintain a proper invoice register with all three dates: invoice date, supply date, and payment receipt date.
Use GST-compliant accounting software that auto-calculates the correct TOS.
For RCM supplies, set up calendar reminders for the 30-day (goods) and 60-day (services) rule.
Reconcile your GSTR-1 and GSTR-3B data with books of accounts every month before filing.
Train your accounts team specifically on TOS rules — this is one of the most misunderstood provisions.
For advance payments, always issue a Receipt Voucher and file correct details in GSTR-1 (Table 11 — Advances).
For imported services, mark a self-invoice date and deposit RCM liability in the correct tax period.

Quick Reference Summary: Time of Supply at a Glance

Category	Forward Charge (FCM)	Reverse Charge (RCM)
Goods	Earliest of: Invoice / Payment / Removal	Earliest of: Receipt of goods / Payment / 30 days from Invoice
Services	Earliest of: Invoice / Payment / Completion (if no invoice in time)	Earliest of: Payment / 60 days from Invoice (or Books entry)
Vouchers (SPV)	Date of Issue of Voucher	N/A
Vouchers (MPV)	Date of Redemption of Voucher	N/A