Indirect Tax Laws and Practice · Supply under GST

Time of Supply of Goods: Special Cases under GST

Updated 11 October 2026 · Fact-checked

Time of supply fixes when GST liability on goods arises. Special cases need extra rules: approval supplies use the invoicing deadline, vouchers use issue or redemption date, rate changes follow section 14 and override section 12, and payment is received on the earlier of the books entry or the bank credit. Match the facts to the rule, then pick the date.

Understand Time of Supply of Goods: Special Cases

Time of supply is the date on which GST liability on a supply arises. It decides which rate, which return period and which tax-point rules apply to you. For goods, the general rule in section 12(2) is the earlier of two dates: the invoice date (or the last date by which the invoice had to be issued) and the date the supplier receives payment. This page deals with the special cases around that rule.

The first special case is goods sent on approval or sale-or-return. Nothing is sold yet when the goods leave the premises, so the supplier gets a fixed outer limit for invoicing. The invoice is due when the supply takes place, or six months from removal, whichever is earlier. That due date is what section 12(2)(a) calls the last date required to issue the invoice. So the time of supply is the earlier of the actual invoice date, the approval date (if invoiced then), the six-month date, or the payment date.

The second special case is vouchers. Under section 12(4), if the supply is identifiable when the voucher is issued, the time of supply is the date of issue. In all other cases it is the date of redemption. Ask one question: do you know what goods the voucher buys?

The third is a change in the rate of tax. Section 14 applies notwithstanding sections 12 and 13. It looks at three facts: whether the goods were supplied before or after the change, when the invoice was issued, and when payment was received. The rules then pick the date that decides which rate applies.

Finally, the date of receipt of payment is defined in Explanation 2 to section 12(2). It is the earlier of the date the payment is entered in your books and the date it is credited to your bank account. Reverse charge supplies of goods follow section 12(3), where the time of supply is the earliest of the receipt of goods, the payment date (books entry or bank debit, whichever is earlier) and the day after 30 days from the supplier's invoice.

Key rules to remember

General rule for goods (forward charge): Time of supply = earlier of (date of invoice or last date to issue invoice) and (date of receipt of payment); Section 12(2). Supply is treated as made only to the extent covered by the invoice or the payment (Explanation 1).
Date of receipt of payment: Earlier of (date entered in books of account) and (date credited to bank account); Explanation 2 to section 12(2). Section 14 has its own proviso on bank credit near a rate change.
Goods sent on approval: Invoice due on the earlier of: date supply takes place, or 6 months from removal; This is the invoicing rule. It is not in the section 12 text supplied here, but it sets the 'last date' that section 12(2)(a) refers to.
Excess payment up to ₹1,000: Excess received up to ₹1,000 over the invoice amount: time of supply for that excess = invoice date for it, at the supplier's option; Proviso to section 12(2). Applies only to the excess, and only if the supplier chooses.
Vouchers: Date of issue if supply is identifiable then; otherwise date of redemption; Section 12(4).
Reverse charge on goods: Earliest of: date of receipt of goods; payment date (books entry or bank debit, whichever is earlier); day after 30 days from supplier's invoice date; Section 12(3). If none can be determined, use the date of entry in the recipient's books.
Supplied before rate change: Invoice and payment both after change: earlier of payment or invoice date. Invoice before, payment after: invoice date. Payment before, invoice after: payment date.; Section 14(a)(i), (ii) and (iii).
Supplied after rate change: Invoice before, payment after: payment date. Both before: earlier of payment or invoice date. Payment before, invoice after: invoice date.; Section 14(b)(i), (ii) and (iii).
Bank credit proviso for rate change: Date of receipt of payment = date of credit in bank, if that credit is after 4 working days from the date of the rate change; Proviso to section 14. Otherwise the Explanation applies: books entry or bank credit, whichever is earlier.
Interest, late fee, penalty: Time of supply for the addition in value = date the supplier receives it; Section 12(6).
Fallback: Periodical return filer: due date of return. Any other case: date of tax payment; Section 12(5), where the time of supply cannot be determined under sub-sections (2), (3) or (4).

How to solve Time of Supply of Goods: Special Cases questions

Use this order for any time of supply question on goods. It stops you from applying the general rule when a special rule overrides it.

1Read the facts and list every date: removal, supply or approval, invoice, payment entered in books, payment credited to bank, voucher issue and redemption, and any rate change date.
2Identify the special feature. Is there a rate change, a voucher, goods on approval, or reverse charge? If there is a rate change, section 14 overrides section 12.
3Fix the date of receipt of payment first. Take the earlier of the books entry and the bank credit. Under section 14, check whether the bank credit falls after four working days from the rate change.
4For approval goods, fix the last invoice date: the earlier of the date supply takes place or six months from removal. Use the earlier of that date and any actual invoice or payment date.
5For vouchers, check whether the supply is identifiable at issue. If yes, use the issue date. If no, use the redemption date.
6For a rate change, decide whether the goods were supplied before or after the change. Then match the invoice and payment dates to the correct clause of section 14.
7Apply the rate in force on the time of supply date and compute the tax. Handle part invoices or part payments separately, since supply is made only to the extent covered.
8State the rule or section you used and give a one-line conclusion.

Quickest way: Three-question shortcut

When to use it: Use it for MCQs and for the first line of a descriptive answer when you have under two minutes.

Is there a rate change? If yes, jump to section 14. Check goods supplied before or after the change, then check where the invoice and payment fall.
If no rate change, is it a voucher or approval supply? Voucher: identifiable gives issue date, otherwise redemption date. Approval: the earlier of approval or six months from removal sets the invoice deadline.
Otherwise use the general rule: the earlier of the invoice or its due date and the payment date, with payment meaning the earlier of the books entry and the bank credit.
Sanity check: the answer must be one of the dates in the question. If you computed a date that is not given, recheck.

Common mistakes in Time of Supply of Goods: Special Cases

Treating the removal date of approval goods as the time of supply.
Students link goods leaving the premises with supply.
Fix: Removal on approval only starts the clock. The supply happens on approval or at six months from removal, whichever is earlier, unless an invoice or payment comes earlier.
Taking the bank credit date as the date of receipt of payment every time.
Students forget the books entry limb of the definition.
Fix: Use the earlier of the date entered in books and the date credited to bank. For a rate change, also apply the four working days proviso in section 14.
Applying the general section 12(2) rule when the rate has changed.
Students remember the general rule best and use it by default.
Fix: Section 14 begins with 'notwithstanding anything in section 12 or 13'. Always start with section 14 when a rate change is in the facts.
Using the redemption date for every voucher.
Students think a supply happens only when the voucher is used.
Fix: If the goods or services the voucher buys are identifiable at issue, the time of supply is the issue date. Redemption is the residual rule.
Mixing the 'before' and 'after' groups under section 14.
The clauses look alike, and the order of invoice and payment is easy to flip.
Fix: First decide whether the supply of goods was before or after the change. Then pick (a) or (b). Then match the invoice and payment order exactly.
Applying the ₹1,000 excess proviso to the whole payment.
Students read it as a general relaxation.
Fix: It covers only the excess amount, only up to ₹1,000 over the invoice, and only if the supplier opts for it. The rest follows the normal rule.

Worked examples

Example 1

Sundaram Textiles Ltd, Coimbatore, sends fabrics worth ₹4,00,000 to a retailer on approval on 10 March 2027. No invoice is issued and no payment is received at the time. (a) The retailer approves the goods on 20 May 2027. (b) Alternatively, the retailer neither approves nor returns the goods. Find the time of supply in each case, assuming no invoice or payment before the dates concerned.

Show the solution

Goods sent on approval: the invoice is due on the earlier of the date supply takes place or six months from removal. This due date is the 'last date' for section 12(2)(a).
Case (a): supply takes place on approval, 20 May 2027. This is within six months of 10 March 2027, so the invoice is due on 20 May 2027.
Section 12(2) takes the earlier of the invoice due date and payment date. No earlier payment or invoice is given, so the time of supply is 20 May 2027.
Case (b): no supply takes place, so the six-month limit applies. Six months from 10 March 2027 is 10 September 2027, so the invoice is due then.
With no earlier invoice or payment, the time of supply is 10 September 2027. If a payment or invoice had come earlier, that earlier date would apply, to the extent covered.

Answer: (a) 20 May 2027. (b) 10 September 2027, the six-month date from removal, unless an invoice or payment comes earlier.

Example 2

Assume the GST rate on a product changes from 12% to 18% with effect from 1 October 2027. Kaveri Appliances supplies goods worth ₹5,00,000 (taxable value) on 20 September 2027. (a) The invoice is issued on 25 September 2027 and payment is received on 10 October 2027. (b) Instead, the invoice is issued on 5 October 2027 and payment was entered in the books and credited to the bank on 28 September 2027. Find the time of supply, the rate and the GST in each case.

Show the solution

The goods were supplied on 20 September 2027, before the rate change on 1 October 2027. So section 14(a) applies.
Case (a): the invoice was issued before the change, and payment came after the change. Under section 14(a)(ii), the time of supply is the invoice date, 25 September 2027.
25 September 2027 is before 1 October 2027, so the old rate of 12% applies. GST = ₹5,00,000 × 12% = ₹60,000.
Case (b): payment was received before the change, but the invoice was issued after it. Under section 14(a)(iii), the time of supply is the payment date, 28 September 2027.
The payment date is the earlier of the books entry and the bank credit; both are 28 September 2027. That is before the change, so the 12% rate applies. GST = ₹5,00,000 × 12% = ₹60,000.

Answer: (a) Time of supply 25 September 2027; rate 12%; GST ₹60,000. (b) Time of supply 28 September 2027; rate 12%; GST ₹60,000.

Exam tips

Write the section you apply (12(2), 12(4), 14(a)(ii) and so on) in your first line. Examiners award marks for the correct rule even if a date slips.
For Section A MCQs on rate change, draw a timeline with the change date and mark the supply, invoice and payment on it. This takes ten seconds and prevents clause mix-ups.
Remember the three dates for payment: books entry, bank credit, and the four working days proviso in section 14. Many case scenarios hinge on one of them.
In approval cases, always compute the six-month date and compare it with any actual invoice or payment date. Pick the earliest.
Do not use MEIS, SEIS-type old facts here. Stick to the Act's text. If a case gives a part payment or part invoice, split the supply and give a time of supply for each part.

Practice questions from Supply under GST

Time of Supply of Goods: Special Cases 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: Special Cases: frequently asked questions

What is the time of supply for goods sent on approval under GST?

The invoice is due when the supply takes place or six months from removal, whichever is earlier. That is the last date for invoicing under section 12(2)(a). The time of supply is the earlier of that date, any actual invoice date, and the payment date, to the extent covered.

What is the time of supply of vouchers under section 12?

Under section 12(4), it is the date of issue of the voucher if the supply is identifiable at that point. In all other cases it is the date of redemption of the voucher. The test is whether the goods are known when the voucher is issued.

How does a change in GST rate affect time of supply?

Section 14 applies notwithstanding sections 12 and 13. You check whether the goods were supplied before or after the change, and the order of invoice and payment dates around it. The clause matched gives the time of supply, and the rate in force on that date applies.

What is the date of receipt of payment for time of supply of goods?

It is the earlier of the date the payment is entered in the supplier's books of account and the date it is credited to the supplier's bank account. Under section 14, if the bank credit is after four working days from the rate change date, the bank credit date is taken as the date of receipt.