CA Intermediate · Taxation

Time of Supply: formula sheet

Full chapter guide

Key formulas

Time of supply of goods, forward charge (Section 12): Time of supply = earliest of (a) date of invoice, or last date by which the invoice should be issued under Section 31, and (b) date on which the supplier receives payment; Applies to the extent covered by the invoice or the payment. The date the supplier receives payment is the earlier of the entry in the supplier's books of account and the credit in the supplier's bank account.
Last date for invoice, goods (Section 31): Goods: invoice on or before removal of goods (where goods move), or on or before delivery or making available to the recipient (where they do not move); Use this as the 'last date' in limb (a) when the actual invoice is late or missing.
Time of supply of goods, reverse charge (Section 12): Earliest of (a) date of receipt of goods, (b) date of payment (earlier of entry in books and debit in bank account), (c) the date immediately after 30 days from the date of the supplier's invoice; If none of these can be determined, use the date of entry in the recipient's books.
Time of supply of services, forward charge (Section 13): If invoice issued within the prescribed time: earliest of invoice date and payment date. If not: earliest of date of provision of service and payment date. Otherwise: date recipient shows receipt in books; The prescribed time for invoicing services is generally 30 days from the date of supply (45 days for an insurer, banker or other financial institution including an NBFC). This 30/45-day limit is laid down in Rule 47 of the CGST Rules, made under Section 31.
Scheme of the three sections: Goods: Section 12 | Services: Section 13 | Change in rate of tax: Section 14; Pick the section first, then forward or reverse charge, then apply the earliest-of rule.
Time of supply of goods (forward charge), section 12(2): Time of supply = Earlier of [ (invoice date or last date for invoice) ; date of receipt of payment ]; Apply it separately to each part of the value covered by an invoice or a payment.
Last date for invoice (goods): Movement of goods: before or at the time of removal. No movement: before or at the time of delivery or making available.; This is the section 31 deadline. If the actual invoice is later than this, use this date.
Last date for invoice, continuous supply of goods: On or before the due date of payment if it is ascertainable from the contract; otherwise before or at the time the supplier receives the payment; if payment is linked to the completion of an event, on or before the date that event is completed.; Section 31(4) deals with continuous supply of goods, where statements of accounts or payments continue over time. Do not confuse it with the rule for services in section 31(2).
Date of receipt of payment: Earlier of: date entered in supplier's books ; date credited to supplier's bank account; Use the earlier of the two.
Excess payment proviso: If the excess received over the invoice value is ≤ ₹1,000, the supplier may, at its option, treat the date of issue of invoice in respect of such excess amount as the time of supply for that excess.; It is the supplier's option. Without the option, the payment date applies to the excess.
Time of supply of goods under RCM (Section 12(3)): 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; Take the earliest of the dates that exist. If a date is not available, ignore it.
Date of payment (clause b): Date of payment = earlier of (date of entry in recipient's books, date of debit in recipient's bank account); Both dates are about the recipient's side of the payment. Choose the earlier one.
30-day invoice limb (clause c): Date = invoice date + 30 days + 1 day; The 30 days are counted from the date of the supplier's invoice (or equivalent document). The relevant date is the day after the 30th day.
Fallback when a, b, c cannot be determined: Time of supply = date of entry in the recipient's books of account; Use it only when clauses (a), (b) and (c) cannot fix the date.
General residual rule: Periodical return required: due date of return. Otherwise: date on which CGST/SGST is paid; This applies where the time of supply cannot be determined under the specific clauses.
Forward charge: invoice issued in time: Time of supply = earlier of (date of invoice, date of receipt of payment); Use when the invoice is issued within 30 days of supply (45 days for insurers, banks, financial institutions and NBFCs).
Forward charge: invoice not issued in time: Time of supply = earlier of (date of provision of service, date of receipt of payment); Use when the invoice is late or not issued.
Forward charge: fallback: Time of supply = date recipient shows receipt of service in books; Applies only when neither of the two rules above can be applied.
Reverse charge: Time of supply = earlier of (date of payment, day immediately after 60 days from date of supplier's invoice); Date of payment = earlier of entry in recipient's books or debit in bank account. The 60 days are counted from the supplier's invoice (or other document issued in place of an invoice). If the time of supply cannot be fixed under these tests, use the date of entry in the recipient's books. The associated-enterprise rule (supplier outside India) is separate: earlier of entry in books or date of payment.
Invoice period for services: 30 days from date of supply; 45 days for insurer, banking company, financial institution including NBFC; Continuous supplies follow the contract: due date of payment, or completion of the event.
Partial payment or invoice: Supply is treated as made only to the extent covered by the invoice or payment; Work out the time of supply separately for each part.
Vouchers: Supply identifiable at issue → date of issue of voucher; otherwise → date of redemption; Test only one thing: can you tell, from the voucher or related documents, which goods or services it buys? Yes means issue date. No means redemption date.
Interest, late fee, penalty for delayed payment: Time of supply of the extra amount = date supplier receives it; Applies only to the addition in value. The main supply is taxed on its own time of supply.
Residual provision: Periodical return required → due date of return; otherwise → date of payment of tax; Use it only when the normal rules cannot fix the time of supply. Do not use it as a shortcut.
Associated enterprise outside India (services, reverse charge): Earlier of: date of entry in recipient's books, date of payment; This is a separate rule, not part of the residual provision. It is a proviso to Section 13(3) and replaces the 60-day invoice limb only under reverse charge.
Change in rate: supply made BEFORE the change: Invoice and payment both after change → earlier of the two; invoice before, payment after → invoice date; payment before, invoice after → payment date; In effect, the new rate applies only when both invoice and payment fall after the change.
Change in rate: supply made AFTER the change: Invoice before, payment after → payment date; both before → earlier of the two; payment before, invoice after → invoice date; In effect, the old rate applies only when both invoice and payment fall before the change.
Date of receipt of payment (Section 14 and forward charge): Earlier of: date entered in books, date credited to bank account; Use this when a question gives both dates.

Quick revision

Section 12 covers time of supply of goods, Section 13 covers services, and Section 14 is the time of supply provision for a change in the rate of tax.
Goods, forward charge: earlier of invoice date (or the last date it should have been issued) and date of receiving payment. Advance payment is itself a trigger date.
Goods, reverse charge: earliest of receipt of goods, payment date, and the date immediately following 30 days from the date of the supplier's invoice.
If none of the reverse charge dates can be determined, the time of supply is the date of entry in the recipient's books.
Services, forward charge, invoice issued in time: earlier of invoice date and payment date. Advance payment is a trigger here too.
Services, forward charge, invoice not issued in time: earlier of date of providing the service and payment date.
Services, reverse charge: earlier of payment date and the date immediately following 60 days from the supplier's invoice date. If the invoice is not received or neither date can be determined, time of supply is the date of entry in the recipient's books.
Date of payment, forward charge: the earlier of the date of entry in the supplier's books and the date credited to the supplier's bank account. Reverse charge: the earlier of the date of debit in the recipient's books and the date of debit in the recipient's bank account.
Vouchers: time of supply is the date of issue if the supply is identifiable then, otherwise the date of redemption.
Interest, late fee or penalty for delayed payment: time of supply is the date the supplier receives it.
Residual goods rule (Section 12(5)): it applies only where the time of supply cannot be determined under the other provisions. Then, where a periodic return has to be filed, it is the due date of that return; in any other case, it is the date on which the tax is paid. Section 13 has a corresponding residual provision for services.
Always draw a timeline and name the rule before you write the date.

Common mistakes

Taking the actual invoice date even when the invoice was issued late Fix: For goods, compare with the date the invoice was due (removal or delivery). For services, check the 30-day limit. Use the legal date when the invoice is late.
Choosing the latest date instead of the earliest Fix: Both Sections 12 and 13 use 'earliest of' for the main cases. Mark all dates and pick the first.
Using the actual invoice date even when the invoice was issued after the last permitted date. Fix: Always work out the section 31 deadline first. If the invoice is later than it, use the deadline.
Ignoring an advance and giving one time of supply for the whole value. Fix: Remember the supply is deemed made to the extent of the invoice or payment. Split the value and date each part.
Taking the invoice date as the time of supply under RCM. Fix: Under Section 12(3), the invoice only matters through the 30-day limb. The date to use is the day after 30 days from the invoice date, not the invoice date.
Using the 30th day itself instead of the day after it. Fix: The law says 'the date immediately following thirty days'. Add one more day. For an invoice dated 10 March, the date is 10 April.
Applying 30 days to a bank, insurer or NBFC. Fix: Check the supplier type first. Insurer, banking company, financial institution including NBFC: 45 days.
Using the invoice date when the invoice was issued late. Fix: Count the days. If the invoice is outside the allowed period, use the date of provision of service, unless payment came earlier.
Taxing every voucher on the date of issue. Fix: Ask whether the goods or services are identifiable at issue. If not, tax on redemption.
Treating the interest for late payment as part of the original supply, taxed on the invoice date. Fix: Tax the main supply on its own date. Tax only the interest or late fee on the date the supplier receives it.

Exam tips

Always start your answer by naming the section (12 for goods, 13 for services) and whether it is forward or reverse charge. This earns the provision mark.
Underline all dates in the question and check for a late invoice. Many questions plant a late invoice to test the 'last date' rule.
If part payment or an advance is given, split the value and show a date for each part.
For MCQs, check whether the question concerns goods or services before reading the options, because the same dates give different answers under Sections 12 and 13.
Where the question gives a rate change, name Section 14 and state which rate applies, then link it to the date you found.
Write 'section 12(2) of the CGST Act, 2017' and the rule in one line first. Examiners give marks for the provision before the working.
Always show the section 31 last date for invoice, even if the invoice was issued on time. It proves you applied both limbs.
If the question gives advance, split the value and give a separate date for each part. This is where most marks are lost.