Time of Supply

• In order to calculate and discharge tax

liability it is important to know the date
when the tax liability arises. In GST law, it
is known as Time of Supply.
• Sections 12, 13 & 14 of the CGST Act,
2017, deal with the provisions related to
time of supply.
• Section 20 of the IGST Act, 2017, deals
with these provisions in case of inter-State
supplies .
 Forward charge
• Forward charge or direct charge is the
mechanism where the supplier of
goods/services is liable to levy and remit
the tax to the credit of Government.

• For instance, if a chartered accountant

provided a service to his client, the service
tax will be payable by the chartered
accountant.
 Time of supply of goods
Earliest of the following dates •
Date of issue of invoice by the supplier.
Date on which supplier receives the
payment.
If invoice is not issued, then
The last date on which supplier is legally
bound to issue the invoice with respect to the
supply.
Date on which supplier receives the
payment.
 Time of issue of invoice for
supply of goods
• As per section 31 of the CGST Act, 2017
,an invoice for supply of goods needs to
be issued before or at the time of
• a) Removal of goods for supply to the recipient where
the supply involves movement of goods.
• b) Delivery of goods or making available thereof to the
recipient
 Time of Supply
in case of Continuous Supply
If continuous supply of goods For Exemple
Supply of Oil etc. then earliest of the
following:
• ♦ Time when each statement is issued.
• ♦ Time when each payment is received.
 Point of time when supplier receives the
payment or date of receipt of payment
• The phrase “the date on which supplier
receives the payment” or “the date of
receipt of payment” means
• The date on which payment is entered in
books of accounts of the supplier, or
• The date on which the payment is credited
to his bank account,
whichever is earlier.
 Examples
• If the date of the invoice is August 20,
2017, the date of receiving the payment
was September 10, 2017.
• The time of supply shall be August 20,
2017 as the time of supply of the goods
will be the earlier of the two considering
the date of issue of the invoice and the
date of receipt of the payment.
If the date of the invoice is October 5, 2017,
the date of receiving the payment was
September 25, 2017.
The time of supply shall be September 25,
2017 as the time of supply of the goods
will be the earlier of the two considering
the date of issue of the invoice and the
date of receipt of the payment
• If the date of the invoice is October 10,
2017, the date of receiving the payment as
per the accounts books was September
29, 2017 and the date on which the
amount was credited to the bank was
October 3, 2017 .
• The time of supply shall be September 29, 2017.
Further, the receipt of the payment will be the
earlier of the two considering the date on which
the payment was recorded in the accounts
books and the date on which the amount was
credited to the bank.
• If the date of the invoice is October 10, 2017, the
date of receiving the payment as per the
accounts books was October 5, 2017 and the
date on which the amount was credited to the
bank was September 30, 2017
The time of supply shall be September 30, 2017
as the time of supply of the goods will be the
earlier of the two considering the date of issue of
the invoice and the date of receipt of the
payment.
 Time of supply of goods under
reverse charge mechanism
• The earliest of the following dates will be time of supply :
• the date of receipt of goods
• the date of payment*
• the date immediately after 30 days from the date of issue
of an invoice by the supplier
• If it is not possible to determine the time of supply, the
time of supply shall be the date of entry in the books of
account of the recipient.
• *This point is no more applicable based this Notification
No. 66/2017 – Central Tax issued on 15.11.2017
 Illustration
• Date of receipt of goods 15th May 2018
• Date of invoice 1st June 2018
• Date of entry in books of receiver 18th
May 2018
• The Time of supply of service, in this case,
will be 15th May 2018
 Time of supply of services
• Earliest of the following dates
• If the invoice is issued within the legally prescribed
period under section 31(2) of the CGST Act, 2017
read with Rule 47 of CGST Rules, 2017 , then
• The date of issue of invoice by the supplier or
• Date of receipt of payment
•
If the invoice is not issued within the legally
prescribed time period then
The date of provision of service or
Date of receipt of payment, whichever is earlier.
 Issuance of Invoice
• An invoice for supply of services needs to be issued
before or after the provision of service but not later than
thirty days from the date of provision of service.

• In case of continuous supply of services the invoice shall

be issued within 30 days from the date when each event
specified in contract which requires the recipient to
make any payment to supplier of services , is completed

• In case of banking company or financial institution the

period of issuance of invoice is 45 days from the date of
supply of service.
 Examples
• ABC Consultancy services issued invoice for
services rendered to Mr. P on 5th August 2017.
Determine the time of supply in following cases:
• a. The provisions of services were completed on
1st July 2017.
• 1st July 2017 will be the time of supply of
services as invoice is not issued within the time
frame of 30 days.
• b. The provisions of services were
completed on 15th July 2017., invoice
issued on 5th August 2017.
•

• 5th August 2017 will be the time of supply

of services as invoice is issued within the
time frame.
• P made the payment on 3rd August 2017,
where provisions of services were
remaining to be completed. invoice issued
on 5th August 2017.
• 3rd August 2017 will be the time of supply
of services as payment received before
invoice date.
• d. payment on 15th August 2017, where
provisions of services were remaining to
be completed. Invoice issued on
5th August 2017.

• . 5th August 2017 will be the time of supply

of services as invoice is issued before the
completion of provisions of services.
 Time of supply of services
under Reverse Charge
• In case of reverse charge the time of
supply for service receiver is earliest of:
• 1. Date of payment*
• 2. The date immediately following 60 days
from date of issue of invoice by supplier.
• In other cases date of entry in books of
accounts of recipient of supply.
• *w.e.f. 15.11.2017 ‘Date of Payment’ is not applicable for goods and applies
only to services. Notification No. 66/2017 – Central Tax
 Why are time place and value of
supply important?
• Time of supply means the point in time when
goods/services are considered supplied’. When the
seller knows the ‘time’, it helps him identify due date for
payment of taxes.
• Place of supply is required for determining the right tax
to be charged on the invoice, whether IGST or
CGST/SGST will apply.
• Value of supply is important because GST is calculated
on the value of the sale. If the value is calculated
incorrectly, then the amount of GST charged is also
incorrect.