CA Final · Indirect Tax Laws

Time of Supply: formula sheet

Full chapter guide

Key formulas

General rule, Section 12(2): Time of supply of goods = Earlier of (A) and (B); Use this for forward charge supplies of goods. For reverse charge, a different rule applies.
Invoice limb (A): A = Earlier of (date of issue of invoice, last date for issue of invoice under Section 31); Last date for goods: before or at removal if goods move; otherwise before or at delivery or when goods are made available.
Payment limb (B): B = Date payment is received = Earlier of (date entered in books, date credited to bank); Use the earlier of the two dates. Do not use the cheque date or the date the buyer says it paid.
Extent rule: Supply is deemed made to the extent covered by the invoice or the payment; Work out the time of supply separately for each part of the value.
Excess receipt relief: Excess received ≤ ₹1,000 over the invoice amount: at the supplier's option, time of supply for the excess = date of the invoice issued for the excess; This is the supplier's option. Without the option, or if the excess is more than ₹1,000, the general rule applies to the excess (earlier of invoice date or receipt date).
Time of supply under reverse charge (goods): Time of supply = earliest of (A) date of receipt of goods, (B) date of payment, (C) date immediately following 30 days from the date of supplier's invoice; Applies where tax is paid or liable to be paid on reverse charge basis. The earliest date wins.
Date of payment (limb B): Date of payment = earlier of (date of entry in recipient's books of account, date of debit in recipient's bank account); Take the earlier of the two dates. Do not use the later one.
30-day date (limb C): Limb C date = invoice date + 31 days; The invoice day is not counted. Days 1 to 30 run after it, and the next day is the time of supply. Example: invoice 10 Sept gives 11 Oct.
Fallback rule: If time cannot be determined under A, B or C: time of supply = date of entry in recipient's books of account; This is the proviso to Section 12(3). It is used only when the three events cannot be applied.
Voucher: supply identifiable at issue: Time of supply = date of issue of voucher; Applies where the supply to which the voucher relates is identifiable at that point (single-purpose type).
Voucher: supply not identifiable at issue: Time of supply = date of redemption of voucher; Applies in all other cases (multi-purpose type). Unredeemed vouchers do not trigger tax on this rule.
Residual: periodical return applies: Time of supply = date on which the return is to be filed; Use the due date, not the actual filing date. Applies only if time cannot be fixed under the forward charge, reverse charge or voucher rules.
Residual: no periodical return: Time of supply = date on which the tax is paid; This is the last-resort rule.
Interest, late fee or penalty for delayed payment: Time of supply of the addition = date on which the supplier receives it; It applies only to the addition in value. The original supply keeps its own time of supply.
Goods, forward charge: Time of supply = earlier of (date of invoice or last date for invoice under Section 31) and (date of receipt of payment); Date of receipt of payment is the date it is entered in books or credited to the bank account, whichever is earlier.
Goods, reverse charge: Time of supply = earliest of (date of receipt of goods), (date of payment), (date immediately following 30 days from date of issue of supplier's invoice); If the date cannot be fixed by these, use the date of entry in the recipient's books.
Associated person supplier, reverse charge: Time of supply = earlier of (date of entry in recipient's books) and (date of payment); Use this in place of the 30-day invoice rule when the supply under reverse charge is from an associated person.
Continuous supply of goods: Invoice due before or at the time of each statement of account or each payment (Section 31(4)); Use this due date in the forward charge rule if the invoice is issued late.
Excess advance up to ₹1,000: Excess received over invoice value up to ₹1,000: supplier may treat the invoice date as time of supply for that excess; It is an option for the supplier, and it applies only to the excess, not to the whole amount.
Change in rate, supply before the change: Both invoice and payment before the change: old rate. Invoice before, payment after: invoice date, old rate. Payment before, invoice after: payment date, old rate. Both invoice and payment after: earlier of the two dates, new rate.; The new rate applies only in the last combination. In every other combination one of the dates is before the change, and the old rate applies.
Change in rate, supply after the change: Both invoice and payment before the change: old rate. Invoice before, payment after: new rate. Payment before, invoice after: new rate. Both after: new rate.; The old rate applies only when both invoice and payment fall before the change.

Quick revision

Time of supply decides the date GST liability arises, and so the tax period and the rate.
Goods, forward charge: earlier of invoice date (or last date to issue invoice) and date of receiving payment.
Date of payment (forward charge): earlier of the date entered in the books and the date credited to the bank.
Excess payment up to ₹1,000 over the invoice value: the supplier may choose the invoice date as time of supply for the excess.
Goods, reverse charge: earliest of receipt of goods, payment date, and the day immediately after 30 days from the supplier's invoice date.
Reverse charge: if none of these dates can be determined, use the date the recipient enters the supply in the books.
Voucher: date of issue if the supply is identifiable at that time; otherwise date of redemption.
Residual case: if a periodic return is required, the due date of the return; otherwise the date of payment of tax.
Interest, late fee or penalty for delayed payment of consideration: date the supplier receives it.
Rate change: mark supply, invoice and payment dates on a timeline against the change date, then apply the rule.
Always state the rule first, apply it to the dates, then conclude.
Check the type of supply before applying any rule. The wrong rule gives the wrong date.

Common mistakes

Using the actual invoice date when the invoice was issued late. Fix: Always work out the Section 31 due date first. Take the earlier of the actual invoice date and the due date.
Using the date the buyer sent the payment, or the cheque date. Fix: Use the earlier of the date entered in the supplier's books and the date credited to the bank.
Treating the supplier's invoice date as the time of supply. Fix: The invoice date matters only to compute limb C, which is the day after 30 days. The invoice date itself is not a time of supply.
Taking the 30th day, or the invoice date plus 30 days, as limb C. Fix: Limb C is the day after the 30 days end, which is invoice date + 31 days. Invoice 10 Sept gives 11 Oct.
Taxing every voucher on the date of issue. Fix: Always test whether the supply is identifiable at issue. If not, the redemption date applies.
Using the actual date of filing the return under the residual rule. Fix: The rule refers to the date on which the return is to be filed. Use the due date, even if the supplier files earlier or later.
Treating an advance received for goods as the time of supply and charging GST on it Fix: Remember that a notification exempts advances for goods. Tax on goods falls due by reference to the invoice date fixed under Section 31. Do not apply this to services.
Using the actual invoice date when the invoice was issued late Fix: Fix the date by which the invoice should have been issued (removal, delivery, or statement of account date). Then take the earlier of that date and the payment date.

Exam tips

In case-scenario MCQs, the traps are the late invoice and the 'books versus bank' payment date. Write the dates down before you choose an option.
Always show the Section 31 due date in your working, even if the question does not ask for it. Marks are given for the logic.
When an advance covers only part of the value, show a separate time of supply for each part. Examiners look for this split.
Open the written answer with 'As per Section 12(2) of the CGST Act, the time of supply of goods is the earlier of...' and then apply the facts and conclude.
Check the charge type in the first line of the facts. A question on reverse charge will not use this rule.
Draw a small timeline of the three dates before answering. It saves time and shows the examiner your method.
Always compute limb C as invoice date + 31 days and show the working line, because marks are given for the date calculation.
In written answers, use provision-facts-conclusion form: state Section 12(3), apply the dates, then conclude the time of supply.