Taxation · Time of Supply

Time of Supply Basics and Section 12 Overview

Updated 4 October 2026 · Fact-checked

Time of supply is the date on which GST liability on a supply arises. Section 12 fixes it for goods, Section 13 for services, Section 14 for rate changes. For goods under forward charge, it is the earlier of the invoice date (or last date to issue it) and the date payment is received.

Understand Time of Supply Basics and Section 12 Overview

GST is not payable when you feel like paying it. The law fixes a point in time at which the liability to pay tax arises. That point is called the time of supply. It answers one question: in which month does this supply have to be reported and taxed?

This date matters for three things. It decides the tax period in which you report the supply in your return. It decides the rate of tax that applies if the rate changes. It also decides when interest starts running if you pay late. Value comes from Section 15 and place from the IGST Act. Time comes from Sections 12 to 14.

The CGST Act splits the rules by type of supply. Section 12 covers goods. Section 13 covers services. Section 14 deals with a change in the rate of tax, and tells you which rate applies when the supply, invoice and payment fall on different sides of the change date. Each of Sections 12 and 13 has separate rules for forward charge (supplier pays tax) and reverse charge (recipient pays tax).

The logic of Section 12 for goods under forward charge is simple. Tax arises at the earliest of two events: the invoice date (or the last date on which the invoice should have been issued) and the date the supplier receives payment. A supplier cannot delay liability by issuing the invoice late, because the law uses the last date allowed for the invoice. The words 'to the extent covered' also matter. If an invoice or payment covers only part of the supply, the time of supply for that part is that date. The rest follows its own date.

Under reverse charge the recipient is the taxpayer, so the events are the recipient's: receipt of goods, payment, and a date linked to the supplier's invoice. Section 12 also has separate rules for vouchers, for interest or late fee added to value, and a residual rule when nothing else fits. Details of each case are in the next topics. Here, learn the scheme and the method.

Key rules to remember

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.

How to solve Time of Supply Basics and Section 12 Overview questions

Use this order for any time of supply question. It keeps you from mixing the rules for goods, services and reverse charge.

1Classify the supply: goods or services. This picks Section 12 or Section 13.
2Check who pays the tax: supplier (forward charge) or recipient (reverse charge). Each has its own rule.
3List every date in the question: date of supply or provision, invoice date, payment received (bank credit and book entry), receipt of goods.
4Work out the legal last date for the invoice. For goods, it is removal or delivery. For services, it is generally 30 days from the date of supply.
5Apply the earliest-of rule for that supply and charge. Where payment is partial, split the supply and find the date for each part.
6If the rate changed in the period, go to Section 14 to pick the rate. If special items appear (voucher, interest, late fee), use the special rule.
7Write the conclusion with the date, the section used and the tax period in which GST must be reported.

Quickest way: Date-line method for MCQs and written answers

When to use it: Use it when the question lists many dates and you have under three minutes.

Draw a one-line timeline and mark every date from the question.
Mark the invoice date, but if the invoice was late, replace it with the legal last date.
For payment, take the earlier of the book entry and the bank credit.
Pick the earliest marked date among the relevant events. For MCQs, eliminate options that give a later date or the wrong event, such as the date of delivery used for a services question.
In written answers, use three lines for step marks: the provision (section and charge type), the dates compared, and the conclusion for each part of the supply.

Common mistakes in Time of Supply Basics and Section 12 Overview

Taking the actual invoice date even when the invoice was issued late
The question gives an invoice date and it looks like the answer.
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
Students link liability with the final event, like full payment.
Fix: Both Sections 12 and 13 use 'earliest of' for the main cases. Mark all dates and pick the first.
Treating the whole supply as taxable on the advance date
Students ignore the words 'to the extent covered'.
Fix: Split the value. The part covered by the advance has the advance date. The balance follows its own invoice, payment or provision date.
Using the book entry date for payment when the bank credit came earlier
Students assume accounting entries decide the date.
Fix: Date of receipt of payment is the earlier of the entry in the books and the credit in the bank account.
Applying the forward charge rule to a reverse charge supply
Both rules look similar and use 'earliest of'.
Fix: Check who pays tax first. Under reverse charge for goods, the events are receipt of goods, payment and the date immediately after 30 days from the supplier's invoice. Reverse charge on services has its own rule in Section 13, so do not borrow the goods rule.
Mixing up the sections: using Section 13 for goods or Section 14 for general timing
Students remember the numbers but not what each covers.
Fix: Remember: 12 is goods, 13 is services, 14 is only for a change in the rate of tax.

Worked examples

Example 1

Mehta Traders (registered) agreed to sell goods for ₹5,00,000 under forward charge. It received ₹1,00,000 in its bank account on 5 July and entered it in the books on 6 July. The goods were removed on 20 July. The invoice was issued on 25 July. The balance ₹4,00,000 was received on 30 July. Find the time of supply. Ignore Notification 66/2017-CT, which exempts advances for goods.

Show the solution

The supply is goods under forward charge, so Section 12 applies.
The invoice for goods is due on or before removal, so the last date for the invoice is 20 July. The actual invoice date of 25 July is late and is not used.
For the advance of ₹1,00,000, the payment date is the earlier of the book entry (6 July) and the bank credit (5 July), which is 5 July. The earliest of 5 July and 20 July is 5 July.
For the balance of ₹4,00,000, the events are the last invoice date (20 July) and payment (30 July). The earliest is 20 July.

Answer: Time of supply is 5 July for ₹1,00,000 and 20 July for ₹4,00,000.

Example 2

A consultant (registered, forward charge) received an advance of ₹50,000 on 2 March. He completed the services on 12 March, with a total fee of ₹2,00,000. He issued the invoice on 20 April. The balance was received on 30 April. Find the time of supply of services under Section 13.

Show the solution

The supply is services under forward charge, so Section 13 applies.
The invoice must be issued within 30 days from the date of supply: 12 March plus 30 days is 11 April. The invoice of 20 April is after this, so it was not issued within the prescribed time.
When the invoice is not issued in time, the time of supply is the earliest of the date of provision of service and the date of receipt of payment.
For the advance part of ₹50,000: payment on 2 March is earlier than provision on 12 March, so it is 2 March.
For the balance of ₹1,50,000: provision on 12 March is earlier than payment on 30 April, so it is 12 March.

Answer: Time of supply is 2 March for ₹50,000 and 12 March for ₹1,50,000.

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.

Practice questions from Time of Supply

Time of Supply Basics and Section 12 Overview 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 Basics and Section 12 Overview: frequently asked questions

What is time of supply under GST with an example?

It is the date on which liability to pay GST arises. For example, if you remove goods on 20 July and the invoice is due that day, the time of supply is 20 July unless you received payment earlier. The tax is then reported in the return for July.

Which sections of the CGST Act deal with time of supply?

Section 12 deals with goods, Section 13 with services and Section 14 with a change in the rate of tax. Sections 12 and 13 each have separate rules for forward charge and reverse charge.

Is tax payable on advances received for goods?

Section 12(2) still refers to payment as a trigger. However, Notification 66/2017-CT exempts registered persons other than composition dealers from paying tax on advances received for supply of goods, so for them the time of supply is the invoice date or the last date for the invoice. In exams, follow the facts and instructions given in the question.

Why does time of supply matter if the tax amount is the same?

It fixes the tax period in which you report the supply, the rate if the rate changes, and the date from which interest runs for late payment. A wrong date can lead to wrong returns and interest.