Indirect Tax Laws · Supply under GST

Time of Supply of Goods under Section 12 of the CGST Act

Updated 5 October 2026 · Fact-checked

Time of supply of goods is the point at which liability to pay GST arises under section 12 CGST. For forward charge, take the earlier of the invoice date (or last date to issue it) and the payment date. For reverse charge, take the earliest of receipt, payment, or the day after 30 days from the supplier's invoice.

Understand Time of Supply of Goods

GST is payable on a supply, but you also need to know when the liability arises. That moment is the time of supply. It decides the tax period in which you report the supply, which rate and rules apply, and when interest starts if you pay late.

Section 12 gives the rules for goods. It does not use one single event. It looks at three common events: when the invoice is (or should be) issued, when payment is received or made, and when goods are received. Which events count depends on who pays the tax.

Under forward charge, the supplier pays the tax. The law looks at the supplier's side: invoice and payment. The time of supply is the earlier of the two. The invoice date here is the actual date of issue or the last date by which the invoice should have been issued, whichever is earlier. So a supplier cannot delay liability by delaying the invoice.

Under reverse charge, the recipient pays the tax. The law looks at the recipient's side: receipt of goods, payment, and a 30-day outer limit from the supplier's invoice. The time of supply is the earliest of these.

Three special rules sit beside these. A voucher has its own rule. Residual cases apply when none of the main rules can be used. Interest, late fee or penalty charged for delayed payment has a separate time of supply. Read the question first to identify which rule applies, then compare the dates.

Key rules to remember

Forward charge: general rule: Time of supply = earlier of (date of invoice, or last date by which invoice should be issued) and (date of receipt of payment); Applies when the supplier pays the tax. The invoice limb itself uses the earlier of actual invoice date and the last permitted date.
Last date for invoice: goods involving movement: Last date = date of removal of goods; The invoice must be issued on or before removal when the supply needs the goods to move.
Last date for invoice: goods not involving movement: Last date = date of delivery, or date goods are made available to the recipient; Used when goods are not moved, for example delivered at the site where they already are.
Goods sent on approval or sale or return: Last date for invoice = earlier of (date on which the supply occurs, i.e. on approval) and (6 months from the date of removal); Section 31(7) gives the invoice deadline for goods sent on approval. Section 12(2)(a) then applies that deadline as the last date to issue the invoice. Compare it with the actual invoice date and take the earlier.
Date of receipt of payment (forward charge): Earlier of (date payment is entered in supplier's books) and (date payment is credited to supplier's bank account); Use this date for the payment limb.
Excess payment up to ₹1,000: Excess over the invoice amount up to ₹1,000: time of supply = date of invoice for that excess, if the supplier opts for it; This is an option only for the supplier, and only under forward charge. It is not automatic. It applies only when the excess is not more than ₹1,000. If the supplier does not opt, the normal rule applies to the excess.
Reverse charge: Time of supply = earliest of (date of receipt of goods), (date of payment, being the earlier of entry in recipient's books and debit in recipient's bank account), and (the day immediately after 30 days from the date of supplier's invoice or similar document); The 30-day limb works only where the supplier has issued an invoice or similar document. If there is none, take the earlier of receipt of goods and payment. If the time of supply still cannot be determined by these dates, the date of entry in the recipient's books is the last resort.
Vouchers: Time of supply = date of issue of voucher if the supply is identifiable at that point; otherwise date of redemption; Single-purpose vouchers fall in the first limb, multi-purpose vouchers usually in the second.
Residual cases: If a periodic return is required: due date of the return. Otherwise: date on which the tax is paid; Use only when none of the specific rules applies.
Interest, late fee or penalty for delayed payment: Time of supply for that addition to value = date on which the supplier receives it; This is a separate time of supply from the main supply.

How to solve Time of Supply of Goods questions

Use this method for any question on time of supply of goods. Write the dates in a short list first, then apply the rule.

1Identify the nature of the supply: ordinary goods, goods under reverse charge, a voucher, or interest/late fee/penalty.
2Decide who pays the tax: supplier (forward charge) or recipient (reverse charge). This picks the rule.
3List all dates given: removal, delivery, invoice, payment entry, bank credit or debit, receipt of goods.
4For forward charge, work out the last date for the invoice (removal date if goods move, delivery date if not). For goods sent on approval or sale or return, section 31(7) sets the invoice deadline: when the supply occurs (on approval) or within 6 months from removal, whichever is earlier. Section 12(2)(a) then applies that deadline as the last date for the invoice limb. Compare the last date with the actual invoice date and take the earlier.
5Find the payment date as the earlier of the books entry and the bank credit. Compare it with the invoice limb and take the earlier.
6For reverse charge, compute the day after 30 days from the supplier's invoice or similar document, but only if the supplier has issued one. Take the earliest of that date, receipt of goods and payment date. If there is no supplier invoice, take the earlier of receipt and payment. If the time of supply still cannot be determined, use the date of entry in the recipient's books as the last resort.
7Check the special cases: voucher, excess up to ₹1,000 (a supplier's option under forward charge), advances for goods, residual and interest or penalty.
8State the rule, show the dates, give the conclusion in one clear line. Mention the section 12 provision you applied.

Quickest way: Date-line shortcut

When to use it: Use it for numerical or case-scenario MCQs with many dates, where you have under two minutes.

Write the dates in order on a line.
Tick forward or reverse charge.
Forward charge: pick the earlier of the invoice limb and the payment date. Remember that the invoice limb is capped by removal or delivery.
Reverse charge: pick the earliest of receipt, payment and the day after 30 days from the supplier's invoice.
If the case is a voucher, ask one question: is the supply identifiable at issue? Yes means issue date; no means redemption date.
Check any extra twist such as a payment excess of ₹1,000 or less, or an interest charge, then mark the answer.

Common mistakes in Time of Supply of Goods

Taking the actual invoice date even though the invoice was issued late.
Students read the invoice date given in the facts and stop.
Fix: Always work out the last date allowed for the invoice (removal or delivery date). Use the earlier of that and the actual date.
Applying forward charge dates to a reverse charge case.
Both rules look alike and students rush to compare invoice and payment.
Fix: Decide first who pays the tax. Under reverse charge use receipt of goods, payment and the 30-day limit.
Counting 30 days incorrectly under reverse charge.
The rule says the day immediately after 30 days, and students either stop at day 30 or count the invoice date as day one.
Fix: Count 30 days after the invoice date, then add one day. For an invoice dated 1 March, the date is 1 April.
Treating every advance payment for goods as fixing the time of supply.
The payment limb exists in the statute, so students apply it to all payments, including advances. Others swing the other way and think the exemption on advances removes the payment limb.
Fix: Section 12(2) still has a payment limb, and Notification 66/2017-CT (dated 15 November 2017) does not change it. The notification only exempts the tax on advances received for supply of goods, for registered persons other than those under a composition scheme. So no GST is payable at the advance stage. If the question asks for the time of supply under section 12(2), still compare the dates. If it asks whether tax is payable on the advance, apply the notification.
Using the voucher date of issue for every voucher.
Students memorise only the first limb.
Fix: Use the issue date only if the supply is identifiable at that point. Otherwise use the redemption date.
Ignoring the separate rule for interest, late fee or penalty.
Students merge it into the time of supply of the main goods.
Fix: Treat the addition as a separate item. Its time of supply is when the supplier receives it.

Worked examples

Example 1

Kiran Traders (registered, Pune) sells machine parts to Arvind Ltd. The goods are removed from Kiran's godown on 20 January. Kiran issues the invoice on 25 January. Arvind pays on 30 January (entered in Kiran's books and credited to the bank on the same day). What is the time of supply?

Show the solution

The goods move, so the last date for the invoice is the date of removal: 20 January.
The actual invoice date is 25 January. The invoice limb is the earlier of 20 January and 25 January, which is 20 January.
The payment date is 30 January. Section 12(2) includes a payment limb, but this payment comes after the last date for the invoice, so it is not an advance. Notification 66/2017-CT, which exempts tax on advances for goods, is therefore not relevant here.
This is forward charge, so the time of supply is the earlier of the invoice limb (20 January) and payment (30 January).
The earlier date is 20 January.

Answer: The time of supply is 20 January, the date of removal, because the invoice should have been issued by then. The late invoice does not push the liability back.

Exam tips

Write the dates in a list or timeline first. Most marks go for showing which date you chose and why.
In MCQs, check the opening line for reverse charge or forward charge before reading the dates. A wrong rule leads to a wrong answer.
For a written answer, use provision-facts-conclusion form: state the section 12 rule, apply it to the given dates, and conclude.
If the case mentions a gift card or prepaid voucher, check whether the goods are identifiable when the voucher is issued.
Look for traps: late invoices, goods sent on approval, excess receipts of ₹1,000 or less, and interest on late payment.

Practice questions from Supply under GST

Time of Supply of Goods in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Time of Supply of Goods: frequently asked questions

What is the time of supply of goods under section 12 CGST?

It is the point when liability to pay GST on goods arises. Under forward charge it is the earlier of the invoice date (or the last date to issue it) and the payment date. Under reverse charge it is the earliest of receipt, payment and the day after 30 days from the supplier's invoice.

How is time of supply decided for goods under reverse charge?

Take the earliest of three dates: receipt of goods, payment date (the earlier of the date of entry in the recipient's books and the date of debit in the bank account), and the day immediately after 30 days from the supplier's invoice or similar document. The 30-day limb works only if the supplier has issued such a document. If there is none, take the earlier of receipt and payment. If the time of supply still cannot be determined, the date of entry in the recipient's books is used.

What is the time of supply for a voucher?

If the supply is identifiable at the time the voucher is issued, the time of supply is the date of issue. If not, it is the date of redemption of the voucher.

Does an advance payment fix the time of supply for goods?

Section 12(2) still has a payment limb, and Notification 66/2017-CT (dated 15 November 2017) does not change it. The notification only exempts the tax on advances received for supply of goods, for registered persons other than those under a composition scheme. So no GST is payable when the advance is received.

When do residual rules apply?

They apply when the time of supply cannot be found by the specific rules. If a periodic return is required, the time is the due date of the return. In other cases it is the date on which the tax is paid.