Goods and Services Tax (GST) and Corporate Tax Planning · Time of Supply

Time of Supply in Special Situations Under GST

Updated 11 October 2026 · Fact-checked

Time of supply fixes the date on which GST liability arises. Normally, for goods, it is the earlier of the invoice date (or last date to issue it) and the payment date. Special cases, such as goods sent on approval, continuous supply and a change in tax rate, shift the dates, and section 14 overrides sections 12 and 13 when the rate changes.

Understand Time of Supply in Special Situations and Practical Problems

Time of supply decides when tax becomes payable and which rate applies. For goods, section 12(2) says it is the earlier of two dates: the date of invoice (or the last date on which the invoice should have been issued under section 31), and the date the supplier receives payment.

The verified core of this page is sections 12 and 14. The approval and continuous-supply invoicing rules below come from section 31 of the CGST Act, which is not reproduced in the text supplied for this page. Check their exact wording in the Act or the ICSI study material before you quote them.

Special situations only change how you find those dates. In goods sent on approval, the supplier does not know at removal whether a supply will happen. Under the section 31 approval rule, the invoice is due when it becomes known that the supply has taken place, or six months from the date of removal, whichever is earlier. That due date then feeds into section 12(2)(a).

In continuous supply of goods, supply is regular or periodic under a contract. Under section 31, invoicing follows statements of accounts or payments, and the invoice is due on or before the date each statement is issued or each payment is received. Treat each statement or payment as a separate supply, to the extent it is covered.

A change in rate of tax is the most tested case. Section 14 applies notwithstanding sections 12 and 13. It looks at three events: the supply of goods or services, the invoice and the payment. It asks which of them fall before and which after the date of change. The result is either the old rate or the new rate.

For reverse charge on goods, the rule differs from the forward charge. Time of supply is the earliest of the date of receipt of goods, the date of payment (books or bank debit, whichever is earlier), and the day immediately following thirty days from the supplier's invoice date. A residual rule applies if none can be found.

Key rules to remember

Goods, forward charge (section 12(2)): Time of supply = earlier of (date of invoice or last date to issue it) and (date of receipt of payment); Supply is treated as made only to the extent covered by the invoice or the payment.
Date of receipt of payment: Earlier of (date entered in supplier's books) and (date credited to bank account); This is the general rule under the Explanation to sections 12 and 14. The proviso to section 14 adds one exception for rate-change cases. Where a clause of section 14 turns on the date of receipt of payment, and the bank credit falls after four working days from the date of change in rate, the credit date is taken as the date of receipt. In every other case, the earlier of the books entry and the bank credit applies.
Goods sent on approval (invoice due date): Invoice due by the earlier of (date it becomes known that supply has taken place) and (six months from date of removal); This is a section 31 invoicing rule. Section 31 is not reproduced in the text supplied for this page, so confirm the wording in the Act or ICSI material. The due date is then used as the 'last date to issue invoice' in section 12(2)(a), and section 12(2) is applied as usual.
Rate change: supply before change: (i) Invoice and payment both after change: earlier of payment date and invoice date. (ii) Invoice before, payment after: invoice date. (iii) Payment before, invoice after: payment date.; Section 14(a). Where all three events fall before the change, the ordinary section 12 rule applies and the old rate governs.
Rate change: supply after change: (i) Invoice before, payment after: payment date. (ii) Invoice and payment both before: earlier of the two. (iii) Invoice after, payment before: invoice date.; Section 14(b).
Goods, reverse charge (section 12(3)): Time of supply = earliest of (date of receipt of goods), (date of payment: books or bank debit, whichever is earlier), (day immediately following 30 days from date of supplier's invoice); If none can be determined, it is the date of entry in the recipient's books. For services, the invoice period is 60 days, not 30.
Residual rule (section 12(5)): Return filers: date on which the return is to be filed. Others: date on which tax is paid.; Use only when sub-sections (2), (3) and (4) cannot fix the date.

How to solve Time of Supply in Special Situations and Practical Problems questions

Use the same method for every problem, whether it is a rate change, an approval case or a plain date puzzle.

1Identify whether the supply is of goods or services, and whether tax is on forward charge or reverse charge. This picks the right section.
2List every date given: removal or supply date, invoice date, payment date, and the date of rate change.
3Fix the payment date properly. Take the earlier of the books entry and the bank credit. If a rate change is involved and the bank credit is after four working days from the change, use the credit date.
4For special cases, work out the invoice due date first under the section 31 invoicing rules. For approval cases, take the earlier of the date supply becomes known and six months from removal. Section 31 is not reproduced here, so confirm its wording in the Act.
5If there is a rate change, mark each event as before or after the change date and match the combination to the correct clause of section 14(a) or (b).
6Apply the rule and name the time of supply. Say which event decides it and why.
7State the applicable rate and compute tax on the value covered by that event. Show the conclusion in one line.

Quickest way: Before-or-after grid for rate-change problems

When to use it: Use it when a problem gives supply, invoice and payment dates around a change in rate.

Draw a line with the change date in the middle and place the three events on it as B (before) or A (after).
If supply is B: if both invoice and payment are A, take the earlier of the two. If only payment is A, take the invoice date. If only invoice is A, take the payment date.
If supply is A: if only payment is A, take the payment date. If both invoice and payment are B, take the earlier. If only invoice is A, take the invoice date.
Do not rely on a shortcut. Match your B/A combination to the exact clause of section 14(a) or 14(b) and apply what that clause says.
Name the rate that was in force on the resulting date.

Common mistakes in Time of Supply in Special Situations and Practical Problems

Using the supply date as the time of supply under section 14.
Students assume the date goods are delivered always matters most.
Fix: Under section 14 the time of supply is always the invoice date or the payment date, as the clause directs. The supply date only decides which clause applies.
Supply before the change, payment before the change, invoice after the change: students take the invoice date.
Students memorise 'earlier date' as a general rule.
Fix: Under section 14(a)(iii) the time of supply is the payment date, because payment came before the change. So the old rate applies.
Ignoring the four-working-day proviso on bank credit.
The proviso is short and sits at the end of section 14.
Fix: The proviso applies to the section 14 clauses that turn on the date of receipt of payment. If the bank credit is after four working days from the date of change in the rate of tax, the credit date is taken as the date of receipt. Otherwise the Explanation applies: the earlier of the books entry and the bank credit.
Treating goods on approval as supplied on the removal date.
Students link supply with movement of goods.
Fix: No supply is known at removal. Under the section 31 approval rule (not reproduced in the supplied text, so confirm it in the Act), fix the invoice due date as the earlier of the date supply becomes known and six months from removal, then apply section 12(2).
Using 60 days for reverse charge on goods.
Students mix up goods and services rules.
Fix: For goods under section 12(3) it is the day following thirty days from the invoice date. Sixty days belongs to services under section 13(3).
Applying the whole invoice value to one date when part payment was made.
Students forget that supply is deemed made to the extent covered by the invoice or payment.
Fix: Split the value. Each advance or part payment can create a separate time of supply for that portion.

Worked examples

Example 1

Rate of GST on a product changes from 12% to 18% with effect from 1 October 2027. Mehta Traders supplies goods of value ₹2,00,000. Case (a): goods are supplied on 20 September 2027, invoice is issued on 25 September 2027 and payment is received on 5 October 2027. Case (b): goods are supplied on 5 October 2027, invoice was issued on 28 September 2027 and payment is received on 10 October 2027 (credited the same day). Find the time of supply and GST in each case.

Show the solution

Case (a): the supply is before the change. The invoice is before the change and payment is after the change.
This matches section 14(a)(ii). The time of supply is the date of issue of invoice, which is 25 September 2027.
That date is before 1 October 2027, so the old rate of 12% applies. GST = ₹2,00,000 × 12% = ₹24,000.
Case (b): the supply is after the change. The invoice is before the change and payment is after the change.
This matches section 14(b)(i). The time of supply is the date of receipt of payment, which is 10 October 2027.
That date is after the change, so 18% applies. GST = ₹2,00,000 × 18% = ₹36,000.

Answer: Case (a): time of supply 25 September 2027, GST ₹24,000 at 12%. Case (b): time of supply 10 October 2027, GST ₹36,000 at 18%.

Example 2

Sharma Textiles sends goods of value ₹5,00,000 on approval to a buyer on 10 January 2028. The buyer approves the goods on 20 March 2028. Sharma issues the invoice on 22 March 2028. No payment has been received earlier. What is the time of supply? What would it be if the buyer neither approved nor returned the goods and no invoice was issued?

Show the solution

Removal is on approval. Apply the section 31 approval rule. It is not reproduced in the text supplied for this page, so confirm its wording in the Act. Under it, the invoice is due by the earlier of the date it becomes known that supply has taken place and six months from the date of removal.
Date supply becomes known: 20 March 2028. Six months from 10 January 2028: 10 July 2028. The earlier is 20 March 2028, so this is the last date to issue the invoice.
Under section 12(2), time of supply is the earlier of (a) the invoice date (22 March 2028) or the last date to issue it (20 March 2028), and (b) the payment date (none received earlier).
The earlier date is 20 March 2028.
Second situation: supply never becomes known and no invoice is issued, so the last date to issue the invoice is six months from removal, which is 10 July 2028.
Time of supply is then the earlier of 10 July 2028 and the date of payment, if any. If no payment is received before 10 July 2028, it is 10 July 2028.

Answer: Time of supply is 20 March 2028. In the second situation it is 10 July 2028, being the last date to issue the invoice, unless payment is received before that date, in which case the payment date applies. Both answers rest on the section 31 approval rule, which you should confirm in the Act.

Exam tips

Write the section number with the rule: section 14 for rate change, section 12(2) for forward charge, section 12(3) for reverse charge. Then give the facts and the conclusion.
In numerical answers, show a small timeline of dates and mark the change date. Examiners follow the logic and give marks for each correct clause.
State the rate and the tax amount in the last line, not just the date. Many students stop at the date.
When asked to differentiate forward and reverse charge, give a short comparison: dates considered, thirty-day rule and the residual rule.
If a fact is missing, such as payment date or bank credit, state your assumption clearly and solve on it.

Practice questions from Time of Supply

Time of Supply in Special Situations and Practical Problems 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 in Special Situations and Practical Problems: frequently asked questions

What is the time of supply when the rate of GST changes?

Section 14 applies and overrides sections 12 and 13. You check whether the supply, invoice and payment fall before or after the change date. The time of supply is then the invoice date or the payment date, as the matching clause directs.

What is the time of supply for goods sent on approval?

First fix the invoice due date under the section 31 approval rule. Section 31 is not reproduced in the text supplied for this page, so confirm its wording in the Act. The due date is the earlier of the date the supply becomes known and six months from removal. The time of supply under section 12(2) is then the earlier of that due date (or the invoice date) and the payment date.

How does time of supply of goods differ between forward and reverse charge?

Forward charge looks at the invoice date (or last date to invoice) and the payment date, whichever is earlier. Reverse charge takes the earliest of receipt of goods, payment date and the day after thirty days from the supplier's invoice date.

Which date counts as receipt of payment?

It is the earlier of the date the payment is entered in the supplier's books and the date it is credited to the bank. In rate-change cases under section 14, there is one exception: if the bank credit is after four working days from the date of change in rate, the credit date is used.