Indirect Tax Laws · Time of Supply

Time of Supply: Special Cases and Practical Problems (GST, CA Final IDT)

Updated 5 October 2026 · Fact-checked

Time of supply fixes the date on which GST becomes payable. For goods, it is the earlier of the invoice date (or the last date it should have been issued) and the payment date. Special cases such as continuous supply, reverse charge, associated persons and rate changes have their own rules, so identify the case first.

Understand Time of Supply Special Cases and Practical Problems

Time of supply decides when your GST liability arises. That date matters because it fixes the tax period for payment and return, and the rate of tax that applies. Section 12 of the CGST Act covers goods. Section 13 covers services. Section 14 overrides both when the rate of tax changes.

The normal rule for goods under forward charge is simple. Time of supply is the earlier of two dates: the date of issue of invoice (or the last date by which the invoice should have been issued under Section 31), or the date the supplier receives payment. Section 31 sets the invoice date for goods. Where goods move, the invoice is due on or before removal. Where they do not move, it is due on or before delivery or making available.

Special cases change only the trigger dates, not the logic. In a continuous supply of goods (successive statements of account or successive payments are involved), Section 31(4) requires the invoice to be issued before or at the time each statement of account is issued or each payment is received. So the last date for invoicing is the statement date or the payment date, as applicable. In reverse charge supplies of goods, the time of supply is the earliest of the date of receipt of goods, the date of payment, or the date immediately following thirty days from the date of issue of the supplier's invoice (or similar document). If none of these can be fixed, it is the date of entry in the recipient's books. Where the supply under reverse charge is from an associated person, the time of supply is the earlier of the date of entry in the recipient's books or the date of payment.

Advances: For goods, a notification exempts advance payments from GST. So tax on goods normally falls due by reference to the invoice date fixed under Section 31, not on the advance. For a small excess, if the supplier receives up to ₹1,000 above the invoice amount, the supplier may choose the invoice date as the time of supply for that excess.

Change in rate: Section 14 applies only when the rate of tax changes, and it overrides Sections 12 and 13. It asks three things. When was the supply made? When was the invoice issued? When was the payment received? The rate depends on how these three dates sit around the date of change. For a supply made before the change, the time of supply is the earlier of invoice and payment if both fall after the change, the invoice date if the invoice is before the change and payment after it, and the payment date if payment is before the change and the invoice after it. Problems test exactly this.

Key rules to remember

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.

How to solve Time of Supply Special Cases and Practical Problems questions

Use the same sequence for every time of supply problem. Write the dates in a line before you start.

1Identify whether the supply is goods or services, and whether it is forward charge or reverse charge.
2List every date given: date of supply (removal or delivery), invoice date, statement date, payment or advance date, and date of rate change.
3Check for a special feature: continuous supply, associated person, advance, or excess amount up to ₹1,000.
4If the invoice is late, replace the actual invoice date with the last date by which it should have been issued under Section 31.
5Apply the correct rule to find the time of supply: earlier of invoice and payment for forward charge goods, or the reverse charge rule.
6If a rate changed, apply Section 14 using the date of supply, invoice date and payment date, and check which of the combinations in the formulas applies.
7Compute tax at the rate applicable on the time of supply date, and state the tax period in which it is payable.
8Write the answer in provision, facts, conclusion form.

Quickest way: Date-line method

When to use it: Use this for MCQs and for short written problems with three or more dates.

Draw a line with the dates in order, marking the rate change date.
Mark whether the supply date is before or after the change.
If the supply is before the change, the new rate applies only when both invoice and payment are after the change. If the invoice is before the change, the invoice date is the time of supply. If only the payment is before the change, the payment date is the time of supply. Either way the old rate applies.
If the supply is after the change, the old rate applies only when both invoice and payment are before the change. In every other combination the new rate applies.
For continuous supply, replace the invoice date with the statement or payment due date if the invoice is late.
For goods, ignore a pure advance if it is exempt, and check only the invoice date.

Common mistakes in Time of Supply Special Cases and Practical Problems

Treating an advance received for goods as the time of supply and charging GST on it
Students carry over the services rule, where the advance triggers tax, to goods.
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
Students read 'date of invoice' literally and miss the last date under Section 31.
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.
Ignoring the statement of account date in a continuous supply
Students treat each delivery as a separate supply with its own removal date.
Fix: For continuous supply of goods, the invoice is due before or at the time of each statement of account or each payment (Section 31(4)). Use that date.
Applying the 30-day reverse charge rule to a supply from an associated person
Students memorise the general reverse charge rule and forget the associated person variation.
Fix: For associated persons, use the earlier of the date of entry in the recipient's books and the date of payment.
Applying the new rate just because the invoice was issued after the rate change
Students look at one date only and ignore the date of supply and payment.
Fix: Check all three dates. If the supply is before the change and the payment is also before it, the time of supply is the payment date and the old rate applies, even if the invoice is issued later. If the invoice is before the change and payment after it, the invoice date is the time of supply and the old rate applies. The new rate applies to a supply made before the change only when both invoice and payment are after it.
Treating the ₹1,000 excess option as applying to the entire advance
Students remember the figure but not the condition.
Fix: The option applies only to the excess over the invoice value, only up to ₹1,000, and only at the supplier's choice.

Worked examples

Example 1

Rao Metals supplies goods worth ₹10,00,000 to a buyer in a case where the GST rate is 12% up to 30 September and 18% from 1 October. Case A: goods are removed on 25 September, invoice is issued on 29 September and payment is received on 10 October. Case B: goods are removed on 25 September, invoice is issued on 4 October and payment is received on 10 October. Find the time of supply and the GST in each case.

Show the solution

The supply (removal) is on 25 September, which is before the rate change on 1 October. So Section 14 for supply before the change applies.
Case A: the invoice (29 September) is before the change and the payment (10 October) is after it. In this combination, the time of supply is the invoice date. The payment date is irrelevant.
Time of supply in Case A is 29 September, so the old rate of 12% applies. GST = ₹10,00,000 × 12% = ₹1,20,000.
Case B: the invoice (4 October) and the payment (10 October) are both after the change. The time of supply is the earlier of the two, which is 4 October.
The new rate of 18% applies in Case B. GST = ₹10,00,000 × 18% = ₹1,80,000.

Answer: Case A: time of supply is 29 September, GST at 12% is ₹1,20,000. Case B: time of supply is 4 October, GST at 18% is ₹1,80,000.

Example 2

Delta Gases supplies gas continuously to a factory. The deliveries for April are covered by a statement of account issued on 5 May. Delta issues the invoice on 8 May. The buyer pays on 12 May. Find the time of supply for the April deliveries.

Show the solution

This is a continuous supply of goods. The invoice is due before or at the time of the statement of account.
The statement of account is dated 5 May, so the last date by which the invoice should have been issued is 5 May.
The actual invoice date is 8 May, which is late. Use 5 May instead.
The payment date is 12 May.
Time of supply is the earlier of the invoice due date (5 May) and the payment date (12 May), which is 5 May.

Answer: The time of supply for the April deliveries is 5 May. The tax is payable for the tax period in which 5 May falls.

Exam tips

In goods problems, write the date of supply, the invoice date and the payment date in a row before reasoning. Most marks are lost by missing one date.
When the problem says an invoice was issued late, quote the Section 31 due date in your answer. It shows you applied the provision.
For rate change questions, state which of the three dates fall before and after the change, then give the time of supply and the rate. Examiners look for this reasoning.
In case-scenario MCQs, check whether the supplier is an associated person or the supply is under reverse charge before using the normal rule.
Do not quote section numbers beyond those you are sure of. Name the provision in words, such as 'rule on change in rate of tax'.

Practice questions from Time of Supply

Time of Supply Special Cases and Practical Problems 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 Special Cases and Practical Problems: frequently asked questions

Is GST payable on an advance received for supply of goods?

No. A notification exempts advance payments received for goods. Tax on goods generally falls due by reference to the invoice date. Services work differently, and the advance can trigger tax.

What is the time of supply for a continuous supply of goods?

The invoice must be issued before or at the time of each statement of account or each payment (Section 31(4)). If the supplier is late, the due date for the invoice is used. The time of supply is the earlier of that date and the payment date.

How do I decide the rate of tax when the rate changes between supply, invoice and payment?

Look at the three dates. If the supply is before the change, the new rate applies only if both invoice and payment are after the change. If the invoice or the payment is before the change, the old rate applies. If the supply is after the change, the old rate applies only if both invoice and payment are before the change.

What is the time of supply when the supply under reverse charge is from an associated person?

It is the earlier of the date of entry in the recipient's books of account and the date of payment. The 30-day rule from the supplier's invoice is not used in this case.