Time of Supply of Goods and Services Under GST

Ribhu Sharma

8 years ago

In the GST model Law, separate provisions have been prescribed to determine the time of supply of goods and services. Liability for GST (Goods and Services Tax) will arise only at the time earliest of occurrence of events of supply, which will be determined as under-

Time of Supply of Goods:

1. Normal Supply: Under normal supply, the time of supply will be the earliest of the following-

Date issue of invoice
Date of receipt of payment.
Date of Removal of Goods, if goods involve movement OR date on which goods are made available to the recipient if goods do not involve movement.
Date on which the recipient shows the receipt of goods in his books of accounts

Above provisions are explained through below given example-

S. No.	Date of Removal	Date of Invoice	Date of Receipt of Payment	Date of Entry in Books of Accounts	Time of Supply
1	22.05.2025	26.05.2025	21.05.2025	30.06.2025	21.05.2025
2	25.06.2025	05.07.2025	27.06.2025	28.06.2025	25.06.2025
3	30.07.2025	24.06.2025	23.06.2025	06.07.2025	23.06.2025
4	21.07.2025	25.07.2025	30.07.2025	20.07.2025	20.07.2025

2. Continuous Supply of Goods: The earliest of the following will be the time of supply:

a. Where the successive statement of accounts or successive payment of accounts are involved-
- Date of expiry of successive payment or statement.
b. No successive payment of accounts: Earliest of following-
- Date of issue of the invoice.
- Date of receipt of payment.

3. Under Reverse Charge: The earliest of the following will be the time of supply:

Date of receipt of supply.
The date of payment as entered in the books of account of the recipient or the date on which the payment is debited in his bank account
The date immediately following thirty days from the date of issue of invoice

4. Goods sent on approval basis: Earliest of the following will be the time of supply:

Before or at the time of supply
Six months from the date of approval.

Time of Supply of Services

The time of Supply shall be

1. Invoices issued within prescribed time: Earliest of following-

Date of issue of the invoice.
Receipt of payment.

2. Invoice not issued within the prescribed time: Earliest of the following-

Date of the provision of service.
Date of Receipt of payment.

3. Case other than the above two situations:

Date on which recipient shows receipt of services in books of accounts.

Determining Time of Supply under Reverse Charge

In the case of reverse charge, the time of supply for the service receiver is the earliest of the following:

The date when payment is made
For goods, it’s 30 days from the invoice date (for services, it’s 60 days)

Starting from 15.11.2017, ‘Date of Payment’ applies only to services and is not applicable to goods, as per Notification No. 66/2017 – Central Tax

In Case of Continuous Supply of Services, Time of Supply shall be

1. Where the due date of payment is ascertainable from the contract: Earliest of the following-

Payment has been received by the supplier of service.
The date on which the recipient is liable to make payment, whether the invoice has been issued or not.

2. Where the due date of payment is not ascertainable from the contract: Earliest of the following-

Date of issue of the invoice.
Date of Receipt of payment.

3. In case payment is related to completion of the event, then the time of completion of an event.

4. In case of reverse charge time of supply shall be earlier of the following dates-

the date of payment as entered in the books of account of the recipient or the date on which the payment is debited in his bank account, whichever is earlier; or
the date immediately following sixty days from the date of issue of the invoice.

Thus above are the provisions discussed related to time value of supply of goods and services which will help us in determining the taxable event in case of supply of goods and services.