Goods and Services Tax (GST) and Corporate Tax Planning · Supply under GST

Time of Supply of Services and Change in Rate of Tax

Updated 11 October 2026 · Fact-checked

Time of supply is the date on which GST liability on a service arises. Under Section 13, for forward charge it is the earlier of the invoice date (if issued in time) or payment date; if the invoice is late, the earlier of service date or payment date. Section 14 decides which rate applies when the rate changes.

Understand Time of Supply of Services and Change in Rate of Tax

GST becomes payable on a supply at a particular point, called the time of supply. This date decides which month's return you report the supply in. It also decides which rate of tax applies if the rate has changed.

For services, Section 13 sets the rule. The idea is simple: tax liability arises at the earliest of the events that show the supply is happening. These events are the invoice, the payment, or the provision of the service. The invoice counts only if it is issued within the period prescribed under Section 31. Otherwise the date of provision of service takes its place.

The supply is treated as made only to the extent covered by the invoice or the payment. So an advance for part of the price fixes the time of supply for that part only. The rest is tested separately. Remember that the date of receipt of payment is the earlier of the date the payment is entered in the supplier's books and the date it is credited to the bank account.

Reverse charge has its own rule in Section 13(3). The tests there are the recipient's payment date, the day after 60 days from the supplier's invoice, or the recipient's own invoice where the recipient must issue it.

Section 14 applies when the rate of tax changes. It overrides Sections 12 and 13. It looks at three dates: when the supply was made, when the invoice was issued and when payment was received, each compared with the date of change. The answer in each case is the invoice date or the payment date, as the section lays out.

Key rules to remember

Forward charge: general rule, Section 13(2): Time of supply = earliest of (a) invoice date, if issued within the Section 31 period, or payment date, whichever is earlier; (b) service date, if invoice is not issued in time, or payment date, whichever is earlier; (c) date recipient shows receipt in books, if (a) and (b) do not apply; Applies to the extent covered by the invoice or payment.
Date of receipt of payment: Earlier of: date entered in supplier's books, date credited to supplier's bank account; Same meaning in Sections 13 and 14, with a bank-credit proviso in Section 14.
Excess up to ₹1,000: Excess amount received up to ₹1,000 over the invoice: time of supply for that excess = invoice date for it, at the supplier's option; Option belongs to the supplier. It applies only to the excess over the tax invoice amount.
Reverse charge, Section 13(3): Earlier of: (a) recipient's payment date (books entry or bank debit, whichever is earlier); (b) day after 60 days from supplier's invoice date, where the supplier issues the invoice; (c) recipient's invoice date, where the recipient must issue the invoice; If none can be determined, use the date of entry in the recipient's books. For associated enterprises with a supplier outside India, use the earlier of books entry or payment date.
Interest, late fee or penalty, Section 13(6): Time of supply for that addition = date the supplier receives it; Covers late payment additions to value.
Change in rate: supply before the change, Section 14(a): (i) invoice and payment both after change: earlier of payment or invoice date; (ii) invoice before change, payment after: invoice date; (iii) payment before change, invoice after: payment date; Rate follows the time of supply so found.
Change in rate: supply after the change, Section 14(b): (i) payment after change, invoice before: payment date; (ii) invoice and payment both before change: earlier of the two; (iii) invoice after change, payment before: invoice date; Check the rate that applies on the date found.
Bank credit proviso, Section 14: Date of receipt of payment = bank credit date, if that credit is after four working days from the date of change in rate; Use it when the payment is entered in books near the change date but credited late.

How to solve Time of Supply of Services and Change in Rate of Tax questions

Use this method for any time of supply question on services. Write the dates in a list first. Most errors come from skipping that step.

1List every date given: service provided, invoice issued, payment entered in books, payment credited to bank, and any rate change date.
2Decide whether the supply is on forward charge or reverse charge. This chooses Section 13(2) or 13(3).
3Find the date of receipt of payment as the earlier of the books entry and the bank credit. For a reverse charge, use the recipient's payment date, books entry or bank debit.
4Test whether the invoice was issued within the period prescribed under Section 31. If yes, use the invoice date or payment date, whichever is earlier. If no, use the service date or payment date, whichever is earlier.
5Split the value if payment or invoice covers only part of it. Fix the time of supply for each part separately.
6If a rate change falls within the dates, move to Section 14. Place the supply as before or after the change, then pick the matching clause.
7If no rule fixes the date, use the fallback: books entry date for the recipient under reverse charge, or the return due date or tax payment date under Section 13(5).
8State the time of supply, then the rate applying, then the tax amount. Close with a one-line conclusion.

Quickest way: Date-line shortcut

When to use it: Use it for long problems with several advances, part invoices and a rate change, where time is short.

Draw a horizontal line. Mark each date on it, with the rate change date as a vertical bar.
Mark each event as S (service), I (invoice) or P (payment).
For a forward charge without a rate change, pick the earliest of I and P. If I is late, use S in place of I.
With a rate change, see which side of the bar each event falls. Apply the clause: payment before the change fixes the time of supply for supplies spanning the change in some cases. Use the section text, not memory, to confirm.
Write the answer as: time of supply, applicable rate, tax. Do part-by-part for advances.

Common mistakes in Time of Supply of Services and Change in Rate of Tax

Using the invoice date even when the invoice was issued late.
Students assume the invoice always fixes the time of supply, as in the familiar goods rule.
Fix: Check the Section 31 period first. If the invoice is late, the service date (or earlier payment date) is the test under Section 13(2)(b).
Taking the whole contract value at the advance date.
The word 'advance' makes students treat the full price as paid.
Fix: Remember the Explanation: supply is deemed made only to the extent covered by the invoice or payment. Split the value.
Taking the bank credit date as the payment date every time.
Students forget the payment date is the earlier of books entry and bank credit.
Fix: Compare both dates and use the earlier one. In Section 14, remember the proviso on bank credit after four working days from the change.
Applying Section 13 when the rate has changed.
Section 14 overrides Sections 12 and 13, but students apply the general rule out of habit.
Fix: Scan the question for a rate change. If there is one, apply Section 14 and its clause for the pattern of dates.
Mixing up the reverse charge rule with the forward charge rule.
Both sections use the invoice and payment, so they look alike.
Fix: Under reverse charge, the tests are the recipient's payment, the day after 60 days from the supplier's invoice, or the recipient's own invoice. The service date is not a test.
Ignoring the ₹1,000 excess option.
It is a small proviso that is easy to miss.
Fix: If the supplier receives up to ₹1,000 over the invoice amount, the supplier may fix the time of supply for that excess at the date of invoice for it.

Worked examples

Example 1

Meridian Consultants Pvt. Ltd. agrees to provide a advisory service for ₹10,00,000 (excluding tax) to Kavya Industries Ltd. It receives an advance of ₹2,00,000 entered in its books on 5 October 2027; the bank credit is on 6 October 2027. The service is completed on 20 October 2027. The invoice for ₹10,00,000 is issued on 25 October 2027, within the period prescribed under Section 31. Find the time of supply.

Show the solution

The supply is of services on forward charge, so Section 13(2) applies.
Date of receipt of payment for the advance is the earlier of the books entry (5 October) and the bank credit (6 October). That is 5 October 2027.
Supply is deemed made to the extent covered by the payment. For ₹2,00,000, the payment date (5 October) is earlier than the invoice date (25 October). So time of supply is 5 October 2027.
For the balance ₹8,00,000, no payment has been received. The invoice was issued within the prescribed period, so the invoice date applies: 25 October 2027.
The service date (20 October) does not apply because the invoice was issued in time.

Answer: Time of supply for ₹2,00,000 is 5 October 2027 and for the balance ₹8,00,000 is 25 October 2027.

Example 2

The rate of GST on a service changes from 12% to 18% with effect from 1 November 2027. The value of service is ₹5,00,000 in each case. Using Section 14, find the time of supply and tax in each case. (A) Service supplied on 20 October 2027; payment of the full amount received on 25 October 2027 (books and bank both); invoice issued on 10 November 2027. (B) Service supplied on 20 October 2027; invoice issued on 28 October 2027; payment received on 5 November 2027. (C) Service supplied on 5 November 2027; invoice issued on 28 October 2027; payment received on 8 November 2027.

Show the solution

Case A: service supplied before the change, payment received before the change, invoice issued after the change. This is Section 14(a)(iii). Time of supply is the date of receipt of payment, 25 October 2027. The old rate of 12% applies. Tax = 12% × ₹5,00,000 = ₹60,000.
Case B: service supplied before the change, invoice issued before the change, payment after the change. This is Section 14(a)(ii). Time of supply is the invoice date, 28 October 2027. The old rate of 12% applies. Tax = ₹60,000.
Case C: service supplied after the change, invoice issued before the change, payment after the change. This is Section 14(b)(i). Time of supply is the date of receipt of payment, 8 November 2027. The new rate of 18% applies. Tax = 18% × ₹5,00,000 = ₹90,000.
Assume in each case that the payment bank credit and books entry fall on the same dates, so the Section 14 proviso on bank credit does not change the result.

Answer: A: time of supply 25 October 2027, 12%, tax ₹60,000. B: time of supply 28 October 2027, 12%, tax ₹60,000. C: time of supply 8 November 2027, 18%, tax ₹90,000.

Exam tips

Write the section number and clause with each conclusion, for example Section 14(a)(ii). Examiners award marks for the provision, analysis and conclusion in that order.
Always list dates in a small table-like list in your answer. It shows your working even if one conclusion is wrong.
Check for a part payment and split the value. Questions often hide an advance inside a longer fact pattern.
Look for reverse charge words such as 'recipient liable to pay tax'. If found, switch to Section 13(3) and check the 60 day rule.
Spot a rate change in the facts early. If there is one, Section 14 overrides the general rule, so say that in your answer.

Practice questions from Supply under GST

Time of Supply of Services and Change in Rate of Tax 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 Services and Change in Rate of Tax: frequently asked questions

What is time of supply of services under Section 13?

It is the date on which the liability to pay GST on a service arises. Under forward charge, it is the earliest of the invoice date (if issued in time) or payment date, or the service date or payment date if the invoice is late. It applies to the extent covered by the invoice or payment.

What is the difference between time of supply of goods and services?

For services, the fallback date when the invoice is late is the date of provision of service. For goods, the corresponding tests under Section 12 are different, such as the removal or delivery of goods. Study the Section 12 topic side by side so you can compare them.

Which section applies when the rate of tax changes?

Section 14 applies. It overrides Sections 12 and 13. It fixes the time of supply by looking at when the supply was made, when the invoice was issued and when payment was received, compared with the date of change.

What counts as the date of receipt of payment?

It is the date the payment is entered in the supplier's books or the date it is credited to the bank account, whichever is earlier. Section 14 adds that bank credit is the date if the credit comes after four working days from the date of change in rate.