CMA Final · Indirect Tax Laws and Practice

Time of Supply under GST for CMA Final

Time of supply fixes the date on which GST liability arises. For goods under the general rule in Section 12(2) of the CGST Act, it is the earlier of the invoice date (or the last date the invoice was due under Section 31) and the date the supplier receives payment. Find both dates, then pick the earlier.

What this chapter covers

This chapter answers one question: on which date does your GST liability arise? That date decides the tax period in which you report the supply, the rate of tax that applies, and when interest starts if you pay late.

The CGST Act gives separate rules for goods (Section 12) and services (Section 13). Each has a general rule, a reverse charge rule, a rule for vouchers, a residual rule, and a rule for interest, late fee or penalty. Section 14 overrides both when the rate of tax changes. This page covers the goods general rule first, because it is the base on which the other rules are built.

The chapter links to the rest of Paper 19. It sits beside value of supply, place of supply, invoicing and input tax credit. A time of supply error flows into the return, the rate and the interest working. In exams it is usually tested as a short date-based working inside a larger case.

Time of supply questions are date puzzles with a clear right answer, so careful students score full marks. They appear as 2-mark MCQs where you pick the correct date, and as parts of written case answers on liability, rate change or reverse charge. The rules are short and the Act text is precise, so effort here pays back quickly. A student who reads the exact wording of Section 12 can also handle the related sections with little extra work.

Time of Supply: topics in the order to study them

1Time of Supply of Goods: General RuleIt is the base rule of Section 12(2). Reverse charge, vouchers, the residual rule and the rate-change rule all build on the invoice-or-payment idea, so learn it first.

How to prepare Time of Supply

Treat this chapter as a rule-application drill. Learn the exact conditions, then practise with dates until choosing the earlier date is automatic.

Read Section 12(1) and 12(2) in the Act text once, slowly. Note the words: earlier of, invoice, last date under Section 31, and payment received.
Write the rule in one line in your own words: time of supply = earlier of (invoice date or due date for invoice) and (date payment is received).
Learn the payment date definition. It is the date the payment is entered in the supplier's books or credited to the bank account, whichever is earlier.
Learn the partial supply rule. Supply is deemed made only to the extent covered by the invoice or the payment, so split an advance or part invoice into portions.
Learn the proviso on excess receipts. If a supplier of taxable goods receives up to ₹1,000 over the invoiced amount, the supplier may choose the invoice date for that excess.
Practise dated examples. For each, list the invoice date, the due date for invoice, the book entry date and the bank credit date, then pick the earlier.
Then move to services, reverse charge and the rate-change rule. Compare them with the goods rule and note where they differ.

Common mistakes in Time of Supply

Taking the invoice date as the time of supply every time.
Fix: Always list both dates and choose the earlier. An advance received before the invoice makes the payment date the time of supply for that amount.
Ignoring the last date for issuing the invoice when the invoice is late.
Fix: Section 12(2)(a) uses the actual invoice date or the last date allowed under Section 31. Use the due date when the invoice is issued late.
Using the cheque date or delivery date as the payment date.
Fix: Use the earlier of the date entered in the supplier's books and the date credited to the bank account.
Treating the whole supply as taxed on one date when only part is invoiced or paid.
Fix: Split the supply. Each part has its own time of supply based on its invoice or payment.
Mixing the goods and services reverse charge periods.
Fix: Goods: 30 days. Services: 60 days. Also remember goods include receipt of goods as a trigger, and the rule takes the earliest date.
Applying Section 12 or 13 when the rate has changed.
Fix: When a question mentions a rate change, apply Section 14 first. It starts with the words notwithstanding Section 12 or 13.

Last-day revision: Time of Supply

Goods general rule: Section 12(2), the earlier of two dates.
Date 1: the invoice date, or the last date by which the invoice had to be issued under Section 31.
Date 2: the date the supplier receives payment.
Payment received means the earlier of the date entered in books and the date credited to the bank.
Supply is deemed made only to the extent covered by the invoice or the payment.
Excess receipt of up to ₹1,000 over the invoice: the supplier may choose the invoice date for the excess.
Reverse charge on goods: the earliest of receipt of goods, payment date, or the day after 30 days from the supplier's invoice.
Reverse charge on services uses 60 days, not 30.
Vouchers: date of issue if the supply is identifiable, otherwise date of redemption.
Interest, late fee or penalty for delayed payment: the date the supplier receives it.
If the rate changes, Section 14 overrides Sections 12 and 13.

Time of Supply practice questions

Time of Supply 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: frequently asked questions

What is the time of supply of goods under GST?

Under the general rule in Section 12(2) of the CGST Act, 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. It is the date on which the liability to pay tax arises.

What counts as the date of receipt of payment?

It is the date the payment is entered in the supplier's books of account or the date it is credited to the supplier's bank account, whichever is earlier.

What if a supplier receives a little more than the invoice amount?

Where the supplier of taxable goods receives up to ₹1,000 in excess of the invoiced amount, the supplier may choose the invoice date as the time of supply for that excess amount.

Does the general rule apply when the GST rate changes?

No. Section 14 applies notwithstanding Sections 12 and 13 and sets its own rules based on whether the supply, the invoice and the payment fall before or after the change in rate.