Sections 12-13 CGST Act — Time of Supply (When Does GST Liability Arise?)

Time of Supply explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.

Time of Supply — The Moment GST Liability is Born

Time of supply determines WHEN you must account for and pay GST. Get it wrong, and you pay interest at 18% per annum from the correct date to the actual date — even if you eventually pay the full tax.

Section 12 — Time of Supply for Goods

The time of supply for goods is the EARLIEST of:

(a) Date of issue of invoice: When you issue the tax invoice — this is the most common trigger. Invoice must be issued before or at the time of removal/delivery of goods.

(b) Last date on which invoice ought to have been issued: If you fail to issue an invoice, the time of supply is the date you SHOULD have issued it (i.e., date of removal/delivery).

(c) Date of receipt of payment: When you receive payment — but only to the extent of the amount received.

In practice, for most businesses: issue invoice → time of supply = invoice date. Simple.

Advance Payments for Goods

For goods: advances received are NOT the time of supply (notification exemption since November 2017). You account for GST only when the invoice is issued. This was a major relief — earlier, even receiving Rs. 10,000 advance required GST payment immediately.

Section 13 — Time of Supply for Services

For services, it is the EARLIEST of:

(a) Date of issue of invoice (if issued within prescribed period): Invoice must be issued within 30 days of supply (45 days for banking/insurance/financial services).

(b) Date of receipt of payment: Unlike goods, for services, advance payment TRIGGERS GST liability. If you receive Rs. 5 lakh advance for a consulting project, GST is payable on that Rs. 5 lakh in the month of receipt — even before you do any work.

(c) Date of provision of service (if invoice not issued in time): If you fail to issue invoice within 30 days, the date you completed the service becomes the time of supply.

Section 14 — Time of Supply Under Reverse Charge

When the recipient pays GST under RCM, time of supply is the EARLIEST of:

(a) Date of receipt of goods/services

(b) Date of payment (per books or debit in bank, whichever is earlier)

(c) 30 days from date of invoice (for goods) / 60 days from date of invoice (for services)

If none of the above can be determined: the date of entry in books of the recipient.

Practical issue: Companies often receive invoices from advocates, GTAs, or other RCM suppliers late. The 30/60-day deemed supply date ensures GST is paid on time even if the invoice is delayed.

Calculation Examples

Example 1 — Goods: Manufacturer issues invoice on March 25, delivers goods on March 28, receives payment on April 10. Time of supply = March 25 (invoice date — earliest). GST reported in March GSTR-3B.

Example 2 — Services with advance: IT company receives Rs. 10 lakh project advance on June 5, issues invoice on August 20 (project completed). Time of supply = June 5 (payment received before invoice). GST on Rs. 10 lakh payable in June GSTR-3B. Balance GST (if any) payable in August.

Example 3 — RCM: Company receives legal opinion on April 15, advocate invoice dated April 20, company makes payment on May 5. Time of supply = April 15 (date of receipt of service — earliest). RCM GST payable in April GSTR-3B.