CS Professional · Goods and Services Tax (GST) and Corporate Tax Planning

Time of Supply under GST for CS Professional

Time of supply is the point at which GST liability arises on a supply. Sections 12 (goods) and 13 (services) fix it using the invoice date, payment date, provision of service or receipt date. To solve a problem, identify goods or services, forward or reverse charge, then apply the earlier or earliest rule.

What this chapter covers

This chapter answers one question: on which date does the liability to pay GST arise? Section 12 gives the rules for goods and section 13 for services. Both follow the same pattern: a general rule for forward charge, a separate rule for reverse charge, a rule for vouchers, a residual rule, and a rule for interest, late fee or penalty.

The two sections look alike but differ in important details. For goods under forward charge, the time of supply is the earlier of the invoice date (or the last date by which the invoice must be issued) and the date of receiving payment. For services, you take the earliest of the dates in section 13(2), and the provision of service date matters when the invoice is late. Under reverse charge, goods use a 30-day period from the supplier's invoice, services use a 60-day period, and the receipt of goods is an additional trigger for goods.

This chapter connects to the rest of the paper. You need it before you can handle the levy, value of supply, invoicing and return filing, because the time of supply decides the tax period in which you pay tax and the rate and law that apply. It also links to registration, since reverse charge liability is a ground for compulsory registration under section 24. In Paper 7.2, questions are case-based, so you must apply the dates to facts and state a clear conclusion.

Time of supply questions are date-driven problems where you can score full marks by applying a rule step by step. The examiner gives you an invoice date, a payment date and a delivery date, and expects you to pick the right section, the right trigger and the right date. If you learn the structure of sections 12 and 13 once, you can solve any variation. Because Paper 7.2 carries 70 marks for GST, accuracy in this chapter also helps you with related chapters on invoicing, input tax credit and returns.

Time of Supply: topics in the order to study them

1Time of Supply: Meaning and ScopeStart here to understand why liability arises at the time of supply and how sections 12 and 13 are organised.
2Time of Supply of Goods under Forward ChargeLearn the earlier-of rule in section 12(2) first, as it is the simplest and the base for all later rules.
3Time of Supply of Goods under Reverse ChargeMove to section 12(3) once the forward charge is clear, and compare the three triggers and the 30-day period.
4Time of Supply for Vouchers, Residual Cases and InterestThese short rules in sub-sections (4) to (6) are easy marks and apply to both goods and services.
5Time of Supply in Special Situations and Practical ProblemsFinish with section 13 for services, the 60-day reverse charge rule, the associated enterprise proviso and mixed numerical problems.

How to prepare Time of Supply

Treat this chapter as a decision tree. Learn the branches, then practise placing facts on them.

Read sections 12 and 13 side by side and make a one-page chart with rows for forward charge, reverse charge, vouchers, residual and interest, and columns for goods and services.
Memorise the keywords: goods forward charge is the earlier of two dates; services forward charge is the earliest of the dates in section 13(2); reverse charge for goods is the earliest of three dates; reverse charge for services is the earlier of the dates in section 13(3).
Learn the explanations: supply is deemed made to the extent covered by the invoice or payment, and the date of receipt of payment is the earlier of the book entry date and the bank credit date.
Learn the provisos: the excess amount up to ₹1,000 option for the supplier, the books-of-account fallback in reverse charge, and the associated enterprise proviso for services.
Solve at least ten dated problems. For each, write the provision, list every date, pick the correct one, and state the conclusion in one line.
Practise part payments and part invoices, since the rule applies to the extent covered by each invoice or payment.
Revise using your chart the day before the exam, and recite the 30-day and 60-day periods without looking.

Common mistakes in Time of Supply

Applying the goods rule to a services problem, or the other way round.
Fix: Begin every answer by stating whether the supply is goods or services and quote the matching section.
Using the earliest date when the rule says earlier of two dates, or the reverse.
Fix: List every date in the facts, then apply the rule exactly as worded in the section.
Mixing up the 30-day and 60-day periods under reverse charge.
Fix: Note that goods use 30 days and services use 60 days, counted from the supplier's invoice, with the time of supply being the day after the period ends.
Ignoring part payments and part invoices.
Fix: Split the supply and apply the rule separately to each part, since supply is deemed made to the extent covered by the invoice or payment.
Taking the date of payment as the cheque date or the date of dispatch.
Fix: Use the earlier of the date the payment is entered in the books and the date it is credited to the bank account.
Writing no conclusion or skipping the provision.
Fix: Write the provision, analyse the facts and state the final date of supply in a clear closing line.

Last-day revision: Time of Supply

Liability to pay tax on goods or services arises at the time of supply, fixed under section 12 or 13.
Goods, forward charge: earlier of invoice date (or last date to issue invoice) and date of receipt of payment.
Services, forward charge: earliest of the dates in section 13(2), depending on whether the invoice is issued within the prescribed period.
Supply is deemed made to the extent covered by the invoice or the payment.
Receipt of payment by the supplier means the earlier of the book entry date and the bank credit date.
Supplier may treat an excess receipt up to ₹1,000 over the invoice amount as supplied on the date of invoice for that excess.
Goods, reverse charge: earliest of receipt of goods, payment date (books or bank debit, earlier), and the day after 30 days from the supplier's invoice.
Services, reverse charge: earlier of payment date, the day after 60 days from the supplier's invoice, or the recipient's invoice date where the recipient must issue it.
If the reverse charge dates cannot be determined, the time of supply is the date of entry in the recipient's books.
Vouchers: date of issue if the supply is identifiable then; otherwise date of redemption.
Residual rule: due date of the periodical return, or otherwise the date tax is paid.
Interest, late fee or penalty for delayed payment: date the supplier receives that addition in value.

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 time of supply under GST?

It is the date on which the liability to pay GST on a supply arises. For goods, section 12 fixes it and for services section 13 fixes it. It decides the tax period in which you must pay tax.

What is the difference between section 12 and section 13?

Section 12 covers goods and section 13 covers services. Goods under forward charge use the earlier of invoice and payment dates. Services use the earliest of the dates in section 13(2), and reverse charge uses 30 days for goods and 60 days for services.

How is time of supply decided under reverse charge?

For goods, take the earliest of receipt of goods, the payment date, and the day after 30 days from the supplier's invoice. For services, take the earlier of the payment date and the day after 60 days from the supplier's invoice, or the recipient's invoice date where the recipient issues it. If none can be fixed, use the date of entry in the recipient's books.

Is this chapter important for the CS Professional exam?

Yes. It is part of the GST portion of Paper 7.2, which is a written paper with case-based questions. Problems on dates are easy to score once you know the rules.