Taxation · Time of Supply

Time of Supply of Services under Forward and Reverse Charge

Updated 4 October 2026 · Fact-checked

Time of supply of services is the point when GST liability arises under Section 13 CGST. Under forward charge, it is the earlier of the invoice date (if issued within 30 days, or 45 for banks and NBFCs) or payment date. If the invoice is late, it is the earlier of the service date or payment date. Under reverse charge, it is the earlier of payment or the day after 60 days from the supplier's invoice.

Understand Time of Supply of Services under Forward and Reverse Charge

Time of supply fixes the date on which GST becomes payable. That date decides which month's return carries the tax and which rate applies. Section 13 of the CGST Act, 2017 gives the rules for services.

Under forward charge, the supplier pays the tax. Two events matter: the invoice and the payment. If the supplier issues the invoice within the time allowed, the invoice date counts. If the invoice is late, the date the service was provided counts. In both cases, if the payment came earlier, the payment date counts. So you always compare two dates and pick the earlier one.

The time allowed for the invoice comes from Section 31 and the invoice rules. For most services it is 30 days from the date of supply. For an insurer, a banking company or a financial institution including an NBFC, it is 45 days. For continuous supplies, the invoice follows the due date of payment or the completion of the event given in the contract.

If neither the invoice-in-time rule nor the late-invoice rule can fix the date, the last fallback is the date the recipient shows receipt of the service in its books of account.

Under reverse charge, the recipient pays the tax. The time of supply is the earlier of two dates: the date of payment, or the date immediately after 60 days from the supplier's invoice (or any other document issued by the supplier in place of an invoice). Date of payment means the earlier of the date entered in the recipient's books or the date the amount is debited in the bank account. If the time of supply cannot be fixed under these two tests, use the date of entry in the recipient's books.

The associated-enterprise rule is separate. It applies only where the supplier is located outside India and the supplier and recipient are associated enterprises. In that case the time of supply is the earlier of the date of entry in the recipient's books or the date of payment. Do not apply it to ordinary reverse charge cases.

A key difference from goods lies in how advances are treated. For services, the date of receipt of payment is a valid time of supply. So an advance fixes the time of supply for the amount received if the payment comes before the other date.

For goods under forward charge, Section 12(2) says the time of supply is the earlier of (a) the date of issue of invoice or the last date on which the invoice should have been issued under Section 31, and (b) the date of payment. So the payment limb stays in the statute for goods. However, Notification 40/2017-Central Tax (Rate) exempts registered persons, other than composition suppliers, from paying tax on advances received for supply of goods. Tax on such goods is then paid when the invoice is issued or due. This relief covers only the advance for goods. There is no such exemption for advances received for services.

For goods under reverse charge, the window is 30 days, not 60, and it runs from the date of the supplier's invoice; the date of receipt of goods and the date of payment are the other dates compared.

Key rules to remember

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.

How to solve Time of Supply of Services under Forward and Reverse Charge questions

Use this order for any time of supply of services question. Read who pays the tax first, because the two charges use different tests.

1Identify the charge: forward charge (supplier pays) or reverse charge (recipient pays). Check for a notified RCM service or an import of service.
2List every date given: date of service, invoice date, payment date, date of entry in books, date of bank debit.
3For forward charge, find the invoice deadline: 30 days from the date of supply, or 45 days if the supplier is an insurer, bank or NBFC.
4Check whether the invoice was issued within the deadline. Count the days exactly.
5If in time, take the earlier of invoice date and payment date. If late, take the earlier of service date and payment date.
6For reverse charge, compute the day after 60 days from the supplier's invoice date, then take the earlier of that date and the payment date. If the time of supply cannot be fixed under these tests, use the date of entry in the recipient's books.
7If payments or invoices are in parts, split the supply and decide the time of supply for each part separately.
8Write the answer with the section reference, the dates compared, and a one-line conclusion.

Quickest way: Two-date comparison for MCQs and written answers

When to use it: Use in the exam when a question gives many dates and you have under three minutes.

Tick the charge first. Forward charge means two tests; reverse charge means 60 days or payment.
Mark the supplier type. If it is a bank, insurer or NBFC, the deadline is 45 days. Otherwise it is 30 days.
Count days from the date of supply to the invoice date. If it is within the deadline, the invoice date is a candidate. If not, the service date is a candidate.
Compare that candidate with the payment date. The earlier date wins.
For RCM, add 60 days to the invoice date and move one day forward. Compare this with the payment date.
MCQ trap check: eliminate options that use the wrong number of days (30 for RCM on services, 60 for forward charge) or the wrong date.
In written answers, use this format: Provision, Facts, Conclusion. State the rule, show the day count, then give the date. This earns step marks even if the final date is wrong.

Common mistakes in Time of Supply of Services under Forward and Reverse Charge

Applying 30 days to a bank, insurer or NBFC.
Students remember 30 days as the default and forget the special 45-day period.
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.
Students assume the invoice date always decides the time of supply.
Fix: Count the days. If the invoice is outside the allowed period, use the date of provision of service, unless payment came earlier.
Ignoring advance payments for services.
Students mix this up with goods, where the advance rules are different.
Fix: For services, the date of receipt of payment is a valid time of supply under Section 13. Take the earlier date. Do not carry over the goods relief. For goods, the time of supply is the earlier of the invoice date (or the last date for the invoice) and payment, but Notification 40/2017-Central Tax (Rate) exempts only the advance received for goods, for registered persons other than composition suppliers. There is no such exemption for advances received for services.
Counting 60 days from the payment or service date under reverse charge.
The 60 days is mistaken for a general credit period.
Fix: Count 60 days from the supplier's invoice date. The time of supply is the date immediately after those 60 days, unless payment is earlier.
Mixing up the goods and services RCM periods.
Both sections look alike.
Fix: Remember: RCM on goods uses 30 days from the supplier's invoice date (compared with the date of receipt of goods and the date of payment). RCM on services uses 60 days from the invoice date (compared with the date of payment).
Treating part payments as one transaction.
Students take only the total contract value.
Fix: Split the value. Decide the time of supply for the part covered by each payment or invoice.

Worked examples

Example 1

Ankit Consultants provides a consulting service worth ₹1,00,000 to Rahul Ltd. The service is completed on 10 April 2026. Ankit receives an advance of ₹30,000 on 5 April 2026. The invoice for ₹1,00,000 is issued on 20 May 2026. The balance of ₹70,000 is received on 10 June 2026. Ankit is not a bank, insurer or NBFC. Find the time of supply under forward charge.

Show the solution

The charge is forward charge. The deadline for the invoice is 30 days from the date of supply (10 April 2026), which is 10 May 2026.
The invoice was issued on 20 May 2026, which is 40 days after 10 April (20 days left in April plus 20 days in May). It is late.
Because the invoice is late, the time of supply is fixed under Section 13(2)(b): the earlier of the date of provision of service (10 April 2026) and the date of receipt of payment. This is worked out separately for each part of the value. The supply is treated as made to the extent of the payment received, so the ₹30,000 advance fixes its own time of supply on the payment date. The later invoice for ₹1,00,000 does not move that part.
For ₹30,000: payment was received on 5 April 2026. Compare 5 April (payment) with 10 April (service). The earlier date is 5 April 2026.
For the balance ₹70,000: compare 10 April (service) with 10 June (payment). The earlier date is 10 April 2026.

Answer: Time of supply is 5 April 2026 for ₹30,000 and 10 April 2026 for ₹70,000. Each part is decided separately under Section 13(2)(b) because the invoice is late.

Example 2

Mehta & Co., an advocate firm, issues an invoice dated 1 July 2026 for legal services of ₹2,00,000 to a business entity in the same State. The services are under reverse charge. The recipient records the payment in books on 15 September 2026, and the bank debit also happens on 15 September 2026. Find the time of supply.

Show the solution

Charge is reverse charge. The time of supply is the earlier of the date of payment or the date immediately after 60 days from the invoice date.
Date of payment: books and bank both show 15 September 2026.
60 days from 1 July 2026 ends on 30 August 2026 (30 days left in July after 1 July, plus 30 days of August). The date immediately after is 31 August 2026.
Compare 15 September 2026 with 31 August 2026. The earlier date is 31 August 2026.

Answer: Time of supply is 31 August 2026, and the recipient must pay GST under reverse charge for that period.

Exam tips

In a many-dates question, write each date on the left margin and tick the ones you use. Examiners award marks for showing the comparison.
Always state whether the supplier is a bank, insurer or NBFC. The 45-day rule is a favourite test point.
For RCM, show the day count of 60 days and name the next date. A wrong final date with a right method still earns marks.
Do not quote sub-section numbers unless you are sure. Quoting Section 13 and the rule in plain words is safe.
For MCQs with no negative marking, never leave a blank. Eliminate options with the wrong number of days and guess among the rest.

Practice questions from Time of Supply

Time of Supply of Services under Forward and Reverse Charge 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 Services under Forward and Reverse Charge: frequently asked questions

What is the time of supply of services under forward charge?

It is the earlier of the invoice date and the date of payment if the invoice is issued within the allowed period. If the invoice is late, it is the earlier of the date of provision of service and the date of payment. The allowed period is 30 days, or 45 days for banks, insurers and NBFCs.

Why do banks and NBFCs get 45 days for the invoice?

The invoice rules give insurers, banking companies and financial institutions including NBFCs a longer period of 45 days from the date of supply. So their invoice is treated as in time up to 45 days, not 30.

What is the time of supply of services under reverse charge?

It is the earlier of the date of payment or the date immediately after 60 days from the supplier's invoice date. If the time of supply cannot be fixed under these tests, it is the date of entry in the recipient's books. A separate rule applies to associated enterprises where the supplier is outside India.

How is time of supply of services different from goods?

For goods under forward charge, Section 12(2) uses the earlier of the invoice date (or the last date by which the invoice should have been issued) and the date of payment. Notification 40/2017-Central Tax (Rate) exempts registered persons, other than composition suppliers, from tax on advances received for goods only; services have no such exemption. For services, a late invoice shifts the test to the date of provision of service. Under RCM, goods use a 30-day window from the supplier's invoice and services use 60 days from the invoice.