When the Invoice Is Late: What the Time of Supply Becomes

Invoice Is Late 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.

Section 13(2) is usually summarised as "the earliest of invoice, provision of service, or payment". That summary hides the mechanism that matters most: the invoice deadline is a switch, and it decides which of two limbs applies.

Miss the deadline and the tax point does not move forward. It moves backwards.

s.13(2)(a): where the invoice is issued within the period prescribed under s.31, the time of supply is the earlier of the invoice date and the date of receipt of payment. s.13(2)(b): where it is not issued within that period, the time of supply is the earlier of the date of provision of service and the date of receipt of payment. For services the s.31(2) period is thirty days from provision of the service — forty-five days for an insurer, banking company, financial institution or NBFC.

The switch

Invoice on time. Limb (a). The tax point is the invoice date (or payment, if earlier). The supplier controls it within the thirty-day window.

Invoice late. Limb (b). The tax point is the date of provision of service (or payment, if earlier). The supplier controls nothing — the date is fixed by when the work was done.

Note what this means arithmetically. A service provided on 5 April and invoiced on 2 May is within thirty days: time of supply 2 May, liability in the May return. The same service invoiced on 20 May is outside thirty days: time of supply 5 April, liability in the April return, with interest under s.50 running from 21 May.

Being fifteen days late with the invoice moved the liability a month earlier, not a month later.

The prescribed periods

Section 31(2): a registered person supplying taxable services shall, before or after the provision of service but within a prescribed period, issue a tax invoice.

Rule 47: the invoice shall be issued within thirty days from the date of supply of service.

Proviso to Rule 47: where the supplier is an insurer, a banking company or a financial institution including an NBFC, the period is forty-five days.

Rule 47 further proviso: an insurer, banking company, financial institution or NBFC, or a telecom operator, or any other class of supplier as notified, making taxable supplies of services between distinct persons as specified in s.25, may issue the invoice before or at the time of recording the supply in the books of account or before the expiry of the quarter during which the supply was made.

Rule 47A (from 01.11.2024): a registered person liable to pay tax under s.9(3) or 9(4) shall issue the self-invoice within thirty days of receiving the supply from an unregistered supplier.

What "date of provision of service" means

The Act does not define it, and for a discrete service it is usually obvious — the date the work was completed and made available to the recipient.

For arrangements without a clean completion point, the analysis has to be built from the contract:

• Milestone contracts — the date each milestone is achieved.
• Retainers and continuous supply — governed instead by s.31(5), with its own triggers. Continuous supply of services →
• Services requiring acceptance — the date of completion, not the date of the customer's sign-off, unless acceptance is part of the scope.
• Services with a deliverable — the date the deliverable is handed over.

The practical point is that limb (b) forces you to establish this date, and a business that has never recorded it will be reconstructing it under audit conditions.

Why the same problem does not arise for goods

Section 12(2)(a) already includes "the last date on which the supplier is required to issue the invoice under s.31" as a limb. So for goods, the deadline is built into limb (a) rather than operating as a switch between two limbs.

The effect is the same in substance — a late invoice does not defer tax — but the drafting is different, and for goods there is no equivalent of s.13(2)(b).

Practical controls

• Close the service-completion date in the system, not just the invoice date. Limb (b) needs it.
• Set an internal invoicing SLA well inside thirty days. Twenty days is a common target, leaving room for approvals.
• Watch month-end services. A service completed on 28 March and invoiced on 29 April is one day late, and moves the liability into March.
• Insurers, banks, financial institutions and NBFCs have forty-five days — and a quarterly option for distinct-person supplies.
• Where an invoice is unavoidably late, compute the liability from the service date and pay with interest rather than reporting it in the later month.
• E-invoicing: the IRN must be generated for the invoice; a late invoice is also a late IRN, with its own consequences under Rule 48(5) — a document for which an IRN was required but not obtained is not treated as an invoice.

Key takeaways

• The s.31 invoice deadline is a switch between s.13(2)(a) and s.13(2)(b).
• Invoice on time → tax point is the invoice date (or earlier payment).
• Invoice late → tax point is the date of provision of service (or earlier payment).
• A late invoice moves liability backwards, generating interest.
• Rule 47: thirty days; forty-five days for insurers, banks, financial institutions and NBFCs.
• Rule 47A: self-invoice within thirty days of receipt from an unregistered supplier.

Read next

• Time of Supply of Services: Rules and Examples
• Continuous Supply of Services and Section 31(5)
• Tax Invoice Under GST: Format, Contents and Rules
• Interest on Delayed GST Payment: Section 50

Disclaimer: Positions stated as on 5 September 2026, based on ICAI Background Material on GST, Volume I (2026 edition).