Direct and Indirect Taxation · Time and Value of Supply

Time of Supply of Goods under GST (Section 12)

Updated 10 October 2026 · Fact-checked

Time of supply of goods is the date on which your GST liability on a supply of goods arises, as fixed by Section 12 of the CGST Act. For forward charge, take the earlier of the invoice date (or last date to issue it) and the date of payment. For reverse charge, take the earliest of three dates.

Understand Time of Supply of Goods

GST is payable when a supply happens, but 'when' is not always the day goods are delivered. The Act fixes a specific date called the time of supply. That date decides which month's return carries the tax, and which rate and rules apply.

Section 12 covers goods. It has two main rules. Under forward charge, the supplier pays the tax, and the time of supply 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.

Under reverse charge, the recipient pays the tax. Here the time of supply is the earliest of three dates: the date of receipt of goods, the date of payment (books entry or bank debit, whichever is earlier), and the day immediately following 30 days from the date of the supplier's invoice.

The Act also deals with special cases: vouchers, supplies where no date can be fixed, and interest, late fee or penalty for delayed payment. Supply is treated as made only to the extent covered by the invoice or the payment. So an advance for part of the goods creates liability only for that part.

Think of it as a race. Whichever trigger event happens first starts the tax liability. Your job in the exam is to list the dates, pick the right one, and say why.

Key rules to remember

Forward charge (Section 12(2)): Time of supply = earlier of (a) date of invoice, or last date to issue invoice under Section 31, and (b) date of receipt of payment; Applies when the supplier pays the tax. Use the last date for invoicing only if the invoice is issued late or not issued.
Date of receipt of payment (Explanation 2): Date of payment = earlier of date entered in supplier's books and date credited to supplier's bank account; Use the earlier date, not the date the cheque was received or the date of deposit.
Reverse charge (Section 12(3)): Time of supply = earliest of (a) date of receipt of goods, (b) date of payment (earlier of books entry and bank debit), (c) the date immediately following 30 days from the supplier's invoice date; Applies when tax is payable by the recipient. If none of the three can be determined, use the date of entry in the recipient's books.
Extent of supply (Explanation 1): Supply is deemed made to the extent covered by the invoice or the payment; Part payment or part invoicing fixes the time of supply only for that part.
Excess amount up to ₹1,000 (proviso): Excess received over the tax invoice amount, up to ₹1,000: time of supply = date of invoice for the excess, at the supplier's option; The option is the supplier's. It applies only where the excess is up to one thousand rupees.
Vouchers (Section 12(4)): Time of supply = date of issue of voucher if supply is identifiable then; otherwise date of redemption; Test is whether the goods are identifiable when the voucher is issued.
Residuary rule (Section 12(5)): If time cannot be fixed under (2), (3) or (4): date on which the periodical return is to be filed; in any other case, date on which tax is paid; Use only as a last resort.
Interest, late fee or penalty (Section 12(6)): Time of supply = date on which the supplier receives such addition in value; Applies to the addition for delayed payment of consideration.

How to solve Time of Supply of Goods questions

Use the same sequence for every problem. It stops you from mixing forward and reverse charge rules.

1Check who pays the tax. Forward charge means supplier pays. Reverse charge means recipient pays. This decides which sub-section applies.
2Confirm the supply is of goods. For services, Section 13 applies, with different rules.
3List every date in the question: delivery or receipt of goods, invoice, payment, bank credit or debit, books entry.
4Fix the payment date properly. For the supplier it is the earlier of books entry and bank credit. For the recipient it is the earlier of books entry and bank debit.
5Under forward charge, work out the invoice date. If the invoice was issued late or not at all, use the last date by which Section 31 required it. Then take the earlier of that and the payment date.
6Under reverse charge, add 30 days to the supplier's invoice date and take the next day. Then take the earliest of receipt of goods, payment date and this date.
7Apply the extent rule. If payment or invoice covers only part of the supply, split the supply and fix a time of supply for each part.
8State the final date, name the section, and give one line of reason. Write it as a clear conclusion.

Quickest way: Date-list and pick-earliest method

When to use it: Use it for any numerical on time of supply of goods when you have under four minutes.

Write 'FC' or 'RCM' at the top of your answer.
List the candidate dates in a column: FC has two (invoice or due date, payment); RCM has three (receipt of goods, payment, day after 30 days from invoice).
Convert payment dates to the earlier of books and bank, as the case may be.
Circle the earliest date. That is the time of supply for that portion.
If amounts differ across dates, repeat the circling for each portion.
Write the date and the section in one sentence.

Common mistakes in Time of Supply of Goods

Using the delivery date as the time of supply under forward charge.
Students think tax arises when goods move, as in the old sale logic.
Fix: Under Section 12(2), delivery is not a trigger. Only the invoice date (or its due date) and the payment date count.
Taking the invoice date when the invoice was issued late, instead of the last date for issue.
Students read 'date of issue of invoice' and stop there.
Fix: The Act says date of issue of invoice or the last date required to issue it. So a late invoice does not postpone the time of supply.
Using 30 days from invoice date itself as the reverse charge date.
The wording 'immediately following thirty days' is read loosely.
Fix: Count 30 days from the invoice date and then take the next day. That is day 31.
Applying the 60-day reverse charge period from services to goods.
Sections 12 and 13 look alike and students mix them up.
Fix: For goods the period is 30 days. For services under Section 13 it is 60 days.
Treating an advance as fixing the time of supply for the whole order.
Students ignore the extent rule.
Fix: Supply is deemed made only to the extent covered by the payment or invoice. Split the supply and fix a date for each part.
Using the cheque receipt date as the date of payment.
The date of receiving a cheque feels like receipt of money.
Fix: Use the date entered in the books or the date credited to the bank, whichever is earlier.

Worked examples

Example 1

Sharma Traders (Jaipur), a registered supplier, agrees to supply machine parts worth ₹5,00,000 (excluding GST) to Verma Industries on forward charge. Goods are delivered on 10 July. The invoice is issued on 20 July. Sharma Traders receives an advance of ₹2,00,000, credited to its bank on 5 July (entered in books on 6 July). The balance ₹3,00,000 is credited to its bank on 25 July. The invoice was issued within the time allowed under Section 31. Determine the time of supply, ignoring GST in the amounts.

Show the solution

Tax is on forward charge, so Section 12(2) applies: earlier of invoice date and payment date, for the extent covered.
Payment date for the advance: books entry 6 July, bank credit 5 July. The earlier is 5 July.
Advance of ₹2,00,000: payment date 5 July, invoice date 20 July. Earlier is 5 July. Time of supply for this part is 5 July.
Balance ₹3,00,000: invoice date 20 July covers the whole supply of ₹5,00,000, so this part is covered by the invoice on 20 July. Payment on 25 July is later. Earlier is 20 July.
Delivery on 10 July is not a trigger under forward charge.

Answer: Time of supply is 5 July for ₹2,00,000 and 20 July for the balance ₹3,00,000.

Example 2

Mehta Steels Pvt. Ltd. (Pune) receives goods worth ₹4,00,000 from an unregistered supplier, and the tax is payable by Mehta Steels under reverse charge. Mehta Steels receives the goods on 12 March. The supplier's invoice is dated 5 March. Mehta Steels records the payment in its books on 20 March and the amount is debited from its bank account on 18 March. Determine the time of supply under Section 12.

Show the solution

Reverse charge applies, so Section 12(3): earliest of three dates.
Date of receipt of goods: 12 March.
Date of payment: books entry 20 March, bank debit 18 March. The earlier is 18 March.
Thirty days from 5 March is 4 April (5 March plus 30 days: 26 days remain in March after 5 March, so 30 days ends 4 April). The date immediately following is 5 April.
Dates: 12 March, 18 March, 5 April. The earliest is 12 March.

Answer: Time of supply is 12 March, the date of receipt of goods.

Exam tips

Write FC or RCM first. Examiners give marks for choosing the correct sub-section.
Always show the date list. Even if your final date is wrong, you can earn step marks for the right method.
In MCQs, watch for traps: delivery date under forward charge, cheque receipt date, and 30 days versus 60 days.
For part payments or part invoices, show the split clearly. The extent rule is a favourite for 14-mark problems.
Quote the section number and the exact trigger in your conclusion, for example 'Section 12(2)(b): date of payment'.

Practice questions from Time and Value of Supply

Time of Supply of Goods 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: frequently asked questions

What is the time of supply of goods under Section 12 of the CGST Act?

It is the date on which liability to pay GST on goods arises. Under forward charge it is the earlier of the invoice date (or last date to issue it) and the date of payment. Under reverse charge it is the earliest of receipt of goods, payment, and the day after 30 days from the supplier's invoice.

What is the difference between forward charge and reverse charge in time of supply of goods?

Under forward charge the supplier pays the tax, and two dates compete: invoice and payment. Under reverse charge the recipient pays, and three dates compete: receipt of goods, payment and the day after 30 days from the invoice. Reverse charge uses the earliest date, and forward charge uses the earlier of two.

Does delivery of goods decide the time of supply?

Under forward charge, delivery is not a trigger in Section 12(2). Under reverse charge, the date of receipt of goods is one of the three dates. So its relevance depends on who pays the tax.

What if the time of supply cannot be determined under the normal rules?

Section 12(5) applies. If a periodical return has to be filed, the time of supply is the date on which the return is to be filed. In any other case it is the date on which the tax is paid.