Goods and Services Tax (GST) and Corporate Tax Planning · 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 on a supply of goods arises under Section 12. For forward charge, it is the earlier of the invoice date (or last date to issue it) and the date of payment. For reverse charge, it is the earliest of receipt of goods, payment, or the day after 30 days from the supplier's invoice.

Understand Time of Supply of Goods under Section 12

GST is payable when a supply happens, but you also need to know in which month the liability arises. That decides the return period, the rate that applies and the date from which interest runs. The date is called the time of supply. Section 12 fixes it for goods.

The Act does not use the date of delivery as the main test for forward charge. It uses two paper events: the invoice and the payment. Whichever comes first triggers liability. The invoice event is the date the supplier actually issues the invoice, or the last date by which Section 31 requires him to issue it, whichever the Act points to as earlier.

The rule applies only to the extent covered. If an invoice covers part of a supply, or you receive part payment, the time of supply arises only for that part. So one supply can have several times of supply.

Where the recipient pays tax under reverse charge, the supplier's actions do not matter as much. The test moves to the recipient's side: receipt of goods, his payment, and a 30-day clock from the supplier's invoice. You take the earliest.

There are also fallback rules. Vouchers have their own rule. If none of the main rules can fix the date, the Act uses the due date of the periodical return, or otherwise the date tax is paid. Interest, late fee or penalty added to the value is taxed when the supplier receives it.

Key rules to remember

Forward charge (Section 12(2)): Time of supply = earlier of (date of invoice, or last date to issue invoice under Section 31) and (date of receipt of payment); Applies to the extent covered by the invoice or payment.
Date of receipt of payment (forward charge): Earlier of (date entered in supplier's books) and (date credited to his bank account); Explanation 2 to Section 12(2).
Excess advance up to ₹1,000: Excess up to ₹1,000 over the invoice amount: time of supply = date of invoice for that excess, at the supplier's option; Proviso to Section 12(2). It is an option, not compulsory.
Reverse charge (Section 12(3)): Time of supply = earliest of (date of receipt of goods), (date of payment: earlier of entry in recipient's books and debit in his bank account), (day immediately following 30 days from date of supplier's invoice or equivalent document); If none of these can be determined, use the date of entry in the recipient's books.
Vouchers (Section 12(4)): Date of issue of voucher if the supply is identifiable at that point; otherwise date of redemption; Single-purpose style vouchers fall under the first limb.
Residuary rule (Section 12(5)): Periodical return required: date on which return is to be filed. Any other case: date on which tax is paid; Used only when sub-sections (2), (3) and (4) cannot fix the date.
Interest, late fee, penalty (Section 12(6)): Time of supply of the addition in value = date on which supplier receives it; Applies to delayed payment of consideration.

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

Use this sequence for any question on time of supply of goods. Write each step in your answer: provision, facts, conclusion.

1Identify who pays the tax. If the supplier, use Section 12(2). If the recipient under reverse charge, use Section 12(3). If vouchers are involved, go to Section 12(4).
2List every date in the facts: invoice date, due date for invoice under Section 31, payment entry in books, bank credit or debit, receipt of goods.
3Fix the payment date correctly. For forward charge take the earlier of the books entry and bank credit. For reverse charge take the earlier of the books entry and bank debit.
4Apply the test: earlier of the two dates for forward charge, earliest of the three for reverse charge.
5Check for part invoice or part payment. Split the supply and give a separate time of supply for each part.
6Check the ₹1,000 excess proviso if the supplier received slightly more than the invoice value.
7If no date can be fixed, apply Section 12(5), then state the conclusion with the month in which tax is payable.

Quickest way: Date-line method

When to use it: Use it when the question lists many dates and you have little time.

Draw a line and mark each date with a short label: INV, PAY, REC, 30D.
For forward charge, circle the earlier of INV and PAY. Ignore delivery date.
For reverse charge, compute the 30D date as the day after 30 days from the supplier's invoice, then circle the earliest of REC, PAY and 30D.
Write the rule in one line, then the date, then the month of liability.

Common mistakes in Time of Supply of Goods under Section 12

Treating the date of delivery as the time of supply in forward charge.
Students carry over the idea of sale from commercial law.
Fix: For forward charge, look only at invoice date (or last date to issue it) and payment date. Pick the earlier.
Using the bank credit date even when the books entry is earlier.
Students assume money counts only when it reaches the bank.
Fix: Take the earlier of the date of entry in the books and the date of credit in the bank account.
Taking the 30-day period as ending on day 30 under reverse charge.
Careless reading of the clause.
Fix: The date is the day immediately following 30 days from the date of the supplier's invoice. Count 30 days, then add one day.
Using the earlier of two dates for reverse charge.
Confusing with forward charge.
Fix: Section 12(3) uses the earliest of three dates: receipt of goods, payment, and the day after 30 days from invoice.
Applying the whole supply to one date when only part was invoiced or paid.
Ignoring Explanation 1.
Fix: Supply is deemed made only to the extent covered by the invoice or payment. Split the value.
Jumping to Section 12(5) too early.
It looks like a simple catch-all.
Fix: Use it only when sub-sections (2), (3) and (4) cannot determine the time of supply.

Worked examples

Example 1

Sharma Steel Ltd, Ludhiana, supplies goods worth ₹5,00,000 (before tax) to a registered buyer. Goods are delivered on 10 March. The invoice, issued within the period allowed under Section 31, is dated 14 March. The buyer pays on 8 March, entered in Sharma Steel's books on 9 March and credited to its bank on 8 March. Find the time of supply.

Show the solution

The supplier pays tax, so Section 12(2) applies.
Invoice date: 14 March (issued within the allowed period).
Payment date: the earlier of books entry (9 March) and bank credit (8 March), which is 8 March.
Time of supply is the earlier of 14 March and 8 March, which is 8 March.
Delivery on 10 March does not decide the date.

Answer: The time of supply is 8 March, so GST liability arises in March on the full ₹5,00,000, as the payment covers the whole supply.

Example 2

Kaveri Traders, a registered person, receives goods from an unregistered supplier on 20 May. The supplier's invoice is dated 5 May. Kaveri Traders pays the supplier on 12 June, entered in its books on 12 June and debited in its bank on 12 June. Tax on this supply is payable under reverse charge. Find the time of supply.

Show the solution

Reverse charge applies, so Section 12(3) applies.
Receipt of goods: 20 May.
Payment date: 12 June.
Thirty days from 5 May ends on 4 June. The day immediately following is 5 June.
The earliest of 20 May, 12 June and 5 June is 20 May.

Answer: The time of supply is 20 May, the date of receipt of goods, as it is the earliest of the three dates.

Exam tips

Always name the sub-section first. Examiners give marks for citing Section 12(2) or 12(3) before applying it.
Present dates in a short list, then the test, then the conclusion. Case answers need provision, analysis and conclusion.
State the date-of-payment definition every time, because it is where facts usually hide a trap.
Check whether the question mentions a part payment or part invoice. Split the supply if it does.
If a rate change appears in the facts, say that Section 14 overrides Section 12 and apply it separately.

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?

It is the date on which liability to pay GST on goods arises. For forward charge it is the earlier of the invoice date (or last date for issuing it) and the date of payment. Reverse charge, vouchers and residuary cases have their own rules.

How is the time of supply under reverse charge for goods decided?

Take the earliest of three dates: receipt of goods, the recipient's payment date, and the day immediately following 30 days from the supplier's invoice date. If none can be fixed, it is the date of entry in the recipient's books.

Does the date of delivery matter for time of supply of goods?

Under forward charge it does not decide the date directly. Invoice and payment decide it. Under reverse charge the date of receipt of goods is one of the three dates compared.

What is the rule for advance received above the invoice amount?

If the supplier receives up to ₹1,000 more than the invoice amount, the time of supply for that excess can be the invoice date for it, at the supplier's option. Larger excess is covered by the normal rule.