Direct and Indirect Taxation · Time and Value of Supply

Time of Supply of Services: Special Cases under GST

Updated 10 October 2026 · Fact-checked

Special cases of time of supply cover vouchers, reverse charge, associated foreign suppliers, interest or late fee, and a change in tax rate. Each has its own trigger date. Identify the case, apply the matching sub-section of section 13 or section 14, and pick the date the law names.

Understand Time of Supply: Special Cases

Time of supply fixes the date on which GST liability arises. It also decides which rate applies. For services, the general rule in section 13(2) is the earliest of invoice date (if issued in time) or payment date, or the date of provision of service if the invoice is late. Some situations do not fit this rule, so the Act gives separate rules.

First, vouchers. Under section 13(4), the time of supply 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. A voucher for a specific service at a specific hotel is identifiable. A general gift card usable for anything is not.

Second, interest, late fee or penalty for delayed payment. Under section 13(6), the time of supply of that added value is the date on which the supplier actually receives it. Interest accrued but not received does not trigger tax yet.

Third, change in rate of tax. Section 14 applies notwithstanding sections 12 and 13. It looks at three things: whether the service was supplied before or after the rate change, when the invoice was issued, and when payment was received. Payment date means the earlier of entry in books or credit in bank. There is a proviso: if bank credit happens after four working days from the date of rate change, the bank credit date is the date of receipt.

Fourth, reverse charge under section 13(3) and associated enterprises. Under the second proviso to section 13(3), where the supplier of service is located outside India and is an associated enterprise, the time of supply is the date of entry in the recipient's books or the date of payment, whichever is earlier. Section 20 of the IGST Act applies these time of supply rules to integrated tax as well.

Key rules to remember

Vouchers (section 13(4)): Time of supply = date of issue of voucher, if supply is identifiable; otherwise date of redemption; Test is whether the supply is identifiable when the voucher is issued.
Interest, late fee, penalty (section 13(6)): Time of supply = date supplier receives the addition in value; Applies only to the addition for delayed payment, not to the main supply.
Reverse charge, services (section 13(3)): Earlier of: (a) payment date in recipient's books or bank debit, whichever is earlier; (b) the date immediately following 60 days from invoice date; (c) date of invoice issued by recipient, where recipient must issue it; Clause (b) applies where the supplier must issue the invoice. If none can be determined, use the date of entry in recipient's books.
Associated enterprise, supplier outside India: Earlier of date of entry in recipient's books or date of payment; Second proviso to section 13(3).
Change in rate, supplied before change (section 14(a)): Invoice and payment both after change: earlier of payment or invoice date. Invoice before, payment after: invoice date. Payment before, invoice after: payment date.; Services were provided before the rate changed.
Change in rate, supplied after change (section 14(b)): Invoice before, payment after: payment date. Both before: earlier of the two. Invoice after, payment before: invoice date.; Services were provided after the rate changed.
Four working days proviso (section 14): If bank credit is after 4 working days from the rate change date, the bank credit date is the date of receipt of payment; Otherwise payment date is the earlier of books entry or bank credit.
Excess amount up to ₹1,000 (section 13(2) proviso): At supplier's option, time of supply of the excess = date of invoice for that excess; Applies where the amount received exceeds the invoice amount by up to ₹1,000.

How to solve Time of Supply: Special Cases questions

Use this order for any special-case question. Do not jump to the date; first classify the case.

1Read the facts and list every date: service provided, invoice, payment received in books, payment credited in bank, rate change date.
2Classify the case: voucher, interest or late fee, reverse charge, associated foreign supplier, or change in rate.
3Write the section you are applying, such as section 13(4) or section 14(a)(ii). Naming it earns marks.
4For a rate change, decide first whether the service was supplied before or after the change. Then compare invoice and payment dates with the change date.
5Fix the payment date correctly: earlier of books entry and bank credit, and check the four working days proviso for a rate change.
6State the time of supply date, then the rate applicable on that date.
7If asked, compute the GST on the value at that rate and close with a one-line conclusion.

Quickest way: Rate change grid

When to use it: Use for any change-in-rate problem with three dates to compare.

Mark the rate change date on a line and place service date, invoice date and payment date on it.
Ask: did the service happen before or after the change?
Before the change: if either invoice or payment falls before the change but the other falls after, the time of supply is the one that happens first in the specific pattern. Invoice before and payment after gives invoice date. Payment before and invoice after gives payment date. Both after gives the earlier of the two.
After the change: invoice before and payment after gives payment date. Payment before and invoice after gives invoice date. Both before gives the earlier.
Apply the rate in force on the date you picked.

Common mistakes in Time of Supply: Special Cases

Treating a voucher as always taxable on redemption.
Students remember redemption as the usual answer.
Fix: Check if the supply is identifiable at issue. If yes, the issue date is the time of supply.
Taxing interest on the due date or accrual date.
Students apply accounting accrual logic.
Fix: Under section 13(6), tax arises only when the supplier receives the interest, late fee or penalty.
Skipping the before or after question in rate change problems.
Students compare only invoice and payment dates.
Fix: First decide whether the service was supplied before or after the rate change. The sub-clauses differ in each case.
Ignoring the four working days proviso.
The proviso is short and easy to miss.
Fix: If the bank credit is after four working days from the rate change, use the bank credit date as the payment date.
Using the earlier of invoice or payment for every case.
It is the general rule, so it feels safe.
Fix: Section 14 overrides section 13 in rate change cases. In some patterns the answer is the later event, such as payment date when payment is after the change but the invoice was issued before it, for services supplied after the change.
Applying the 60-day reverse charge limit when the recipient issues the invoice.
Students memorise 60 days alone.
Fix: The 60-day clause applies where the supplier must issue the invoice. Where the recipient issues it, clause (c) uses the recipient's invoice date.

Worked examples

Example 1

Rate of GST on a service changes on 1 October. Aarav Consultants provides the service on 20 September, issues the invoice on 25 September and receives payment on 10 October. Identify the time of supply.

Show the solution

Service was supplied before the rate change (20 September is before 1 October).
Invoice was issued before the change (25 September) and payment was received after the change (10 October).
This matches section 14(a)(ii): invoice issued before the change, payment after.
Time of supply is the date of issue of invoice, 25 September.

Answer: Time of supply is 25 September, so the old rate applies.

Example 2

Rate of GST on a service changes on 1 April. Meera Events provides the service on 10 April. It issues the invoice on 20 March and receives the payment in its books on 15 April. Find the time of supply.

Show the solution

Service was supplied after the rate change (10 April is after 1 April).
Invoice was issued before the change (20 March) and payment was received after the change (15 April).
This matches section 14(b)(i): payment received after the change but invoice issued before.
Time of supply is the date of receipt of payment, 15 April.

Answer: Time of supply is 15 April, so the new rate applies.

Exam tips

Write the section number next to each conclusion. Step marks are given for the right provision.
Draw a small date line for rate change questions. It prevents mixing up before and after.
Always state the payment date rule: earlier of books entry or bank credit.
For MCQs, look for key words: voucher identifiable, interest received, associated enterprise outside India.

Practice questions from Time and Value of Supply

Time of Supply: 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: Special Cases: frequently asked questions

What is the time of supply of vouchers under GST?

Under section 13(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.

When is GST payable on interest or late fee?

Under section 13(6), the time of supply of interest, late fee or penalty for delayed payment is the date on which the supplier receives it. Value of such amounts is included under section 15(2)(d).

How is time of supply decided when the GST rate changes?

Section 14 applies. You check whether the service was supplied before or after the change and then compare the invoice date and payment date with the change date.

Does the IGST Act have its own time of supply rules?

Section 20 of the IGST Act applies the CGST provisions on time and value of supply to integrated tax, with necessary changes. So the same rules are used.