Indirect Tax Laws and Practice · Supply under GST

Time of Supply of Goods under Section 12 CGST Act

Updated 11 October 2026 · Fact-checked

Time of supply of goods is the date on which GST liability arises. Under forward charge, it is the earlier of the invoice date (or the last date the invoice was due under Section 31) and the date payment is received. Reverse charge and residual cases have their own rules.

Understand Time of Supply of Goods under Section 12

GST becomes payable not when goods are sold in the commercial sense, but at the time of supply. Section 12 fixes that date for goods. It decides which tax period you report the supply in, and so when you must pay the tax.

For normal (forward charge) supplies, the law picks the earlier of two events. The first is the date of invoice, or the last date by which the invoice should have been issued under Section 31, whichever you take as the invoice limb. The second is the date the supplier receives payment. Whichever comes first triggers liability.

The invoice limb works with Section 31. For goods that move, the invoice is due before or at the time of removal. For goods that do not move, it is due before or at the time of delivery or making them available. So if the supplier is late in invoicing, the law uses the due date, not the actual late date.

Supply is treated as made only to the extent covered by the invoice or payment. So an advance of ₹40,000 on a ₹1,00,000 order creates a time of supply for ₹40,000 on the payment date. The rest follows its own invoice or payment.

Where the recipient pays tax under reverse charge, the supplier's dates matter less. The law looks at the earliest of receipt of goods, payment date, and the day after 30 days from the supplier's invoice. If none can be fixed, residual rules apply.

Key rules to remember

Forward charge: Section 12(2): Time of supply = earlier of (invoice date or last date to issue invoice under Section 31) and (date of receipt of payment); Applies to the supplier of goods. Applied separately to each part of the supply covered by an invoice or payment.
Date of receipt of payment: Earlier of (date entered in supplier's books) and (date credited to supplier's bank account); This is Explanation 2 to Section 12(2).
Excess advance up to ₹1,000: Excess received up to ₹1,000 over the invoice amount: time of supply = invoice date for that excess, at the supplier's option; Applies only where the excess is received over the amount indicated in the tax invoice, and only up to ₹1,000.
Reverse charge: Section 12(3): Time of supply = earliest of (date of receipt of goods), (earlier of the payment date in recipient's books and the date debited in his bank account), and (the day immediately following 30 days from the date of the supplier's invoice or similar document); If none of these can be determined, the time of supply is the date of entry in the recipient's books of account.
Vouchers: Section 12(4): Date of issue of voucher if the supply is identifiable then; otherwise the date of redemption; Applies to supply of vouchers by a supplier.
Residual: Section 12(5): Where a periodical return has to be filed: the date the return is to be filed. In any other case: the date the tax is paid; Used only when sub-sections (2), (3) or (4) cannot determine the time.
Interest, late fee, penalty: Section 12(6): Time of supply of the addition in value = date the supplier receives it; Applies to additions for delayed payment of consideration.

How to solve Time of Supply of Goods under Section 12 questions

Use the same order every time. It stops you mixing forward charge and reverse charge dates.

1Identify who pays the tax: the supplier (forward charge) or the recipient (reverse charge). This picks the sub-section.
2List all dates given: order, removal or delivery, invoice, payment entered in books, payment credited to bank, receipt of goods.
3For each payment, take the earlier of the books date and the bank credit date as the date of receipt of payment.
4For forward charge, find the invoice limb. Use the actual invoice date if issued on time. If it was late, use the last date allowed under Section 31, namely before or at removal (movement) or delivery (no movement).
5Split the supply by invoice and payment. For each portion, take the earlier of the invoice limb and the payment date.
6For reverse charge, compute the day after 30 days from the supplier's invoice date, then take the earliest of the three dates.
7Check special cases: vouchers, excess advance up to ₹1,000, interest or late fee, and the residual rule.
8State the time of supply for each portion in a clear line, with the reason.

Quickest way: Earliest-date table

When to use it: Use in MCQs and short problems where dates are given and you must pick one date quickly.

Write two columns: Invoice limb and Payment. Add a Reverse charge column only if the recipient pays tax.
Fix the invoice limb first. If the invoice was late, replace its date with the due date under Section 31.
Convert every payment to the earlier of books date and bank credit date.
Pick the earliest date in the relevant columns. For partial payments, repeat per portion.
For reverse charge, count 30 days and add one day. Do not add 60 days for goods; 60 days applies to services.

Common mistakes in Time of Supply of Goods under Section 12

Using the actual late invoice date instead of the last date to issue the invoice.
Students read the date in the question and stop there.
Fix: Always ask when the invoice should have been issued under Section 31. Use that due date if the actual invoice was late.
Taking the bank credit date as the date of payment even when the books entry is earlier.
Bank credit feels like the real receipt.
Fix: Take the earlier of the books entry date and the bank credit date, as Explanation 2 requires.
Applying 60 days under reverse charge for goods.
Confusion with Section 13, which uses 60 days for services.
Fix: For goods under Section 12(3), the period is 30 days from the date of invoice, and the date is the day immediately following that.
Treating the whole supply as made on the advance date.
Students forget the 'to the extent' rule.
Fix: Apply the invoice or payment date only to the portion covered. Work out the balance separately.
Ignoring the ₹1,000 excess proviso or applying it to any excess.
The proviso is short and easy to overlook.
Fix: It covers excess received up to ₹1,000 over the invoiced amount, and only at the supplier's option. Larger excess follows the normal rule.
Jumping to the residual rule too early.
Students see missing information and assume the date cannot be found.
Fix: Use Section 12(5) only when sub-sections (2), (3) or (4) cannot determine the time.

Worked examples

Example 1

Sharma Traders (registered) agrees on 5 March to supply goods to Patel Stores for ₹2,00,000, to be moved by road. Goods are removed on 12 March. The invoice is issued on 18 March. Patel pays ₹50,000 as advance, credited to Sharma's bank on 8 March (entered in books on 9 March), and the balance on 25 March. Determine the time of supply.

Show the solution

Forward charge applies, so Section 12(2) is used.
Goods move, so the invoice was due before or at removal, that is by 12 March. The invoice was late, so the invoice limb is 12 March, not 18 March.
Advance of ₹50,000: the date of receipt is the earlier of books (9 March) and bank (8 March), so 8 March.
For the ₹50,000 portion, take the earlier of 8 March and 12 March, which is 8 March.
For the remaining ₹1,50,000, the invoice limb is 12 March and the payment is 25 March. The earlier is 12 March.

Answer: Time of supply is 8 March for ₹50,000 and 12 March for ₹1,50,000.

Example 2

Mehta Industries, a registered person, receives goods from an unregistered supplier on 10 June. The supplier's invoice is dated 2 June. Mehta enters the payment in its books on 20 July and the amount is debited from its bank on 22 July. Tax is payable under reverse charge. Determine the time of supply of goods.

Show the solution

Reverse charge applies, so Section 12(3) is used, with the earliest of three dates.
Date of receipt of goods: 10 June.
Payment date: earlier of books entry (20 July) and bank debit (22 July), so 20 July.
Invoice limb: day immediately following 30 days from 2 June. 30 days from 2 June ends on 2 July, so the following day is 3 July.
The earliest of 10 June, 20 July and 3 July is 10 June.

Answer: Time of supply is 10 June, the date of receipt of goods.

Exam tips

Write the sub-section you are applying, such as Section 12(2) or 12(3). It shows the examiner your reasoning.
In MCQs, read the dates twice. The trap is usually a late invoice, a books entry earlier than bank credit, or a reverse charge period.
Show each portion separately when the question has advances and balances. State the date and the amount for each.
Give a one-line reason for each date chosen, such as 'invoice due at removal' or 'advance received earlier'.
Revise Section 31 timings together with this topic, because the invoice limb depends on them.

Practice questions from Supply under GST

Time of Supply of Goods under Section 12 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 under Section 12: frequently asked questions

What is the time of supply of goods under Section 12 for a normal supply?

It is the earlier of the invoice date (or the last date for issuing the invoice under Section 31) and the date the supplier receives payment. This is the forward charge rule in Section 12(2).

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

It is the date the payment is entered in the supplier's books or the date it is credited to his bank account, whichever is earlier. This is stated in Explanation 2 to Section 12(2).

How is time of supply of goods determined under reverse charge?

It is the earliest of the date of receipt of goods, the payment date (books or bank debit, whichever is earlier), and the day immediately following 30 days from the supplier's invoice. If none can be determined, it is the date of entry in the recipient's books.

What happens if the supplier receives an advance before the invoice?

The time of supply for the amount received is the advance date, because it is earlier than the invoice limb. The rest of the supply follows its own invoice or payment date.

Does the same rule apply to services?

No. Section 13 governs services and differs, for example it uses 60 days for reverse charge. Learn the two sections side by side to avoid mixing them.