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

Under the CGST Act, 2017, the liability to pay tax on goods arises at the time of supply. For a forward charge supply of goods, the time of supply is determined as:

The time of supply of goods under forward charge is the earlier of two dates: the date of invoice issue, or the last date by which the invoice should have been issued, and the date the supplier receives payment. The later-of rule is incorrect.

  1. AThe later of the date of invoice and the date of receipt of payment
  2. BThe earlier of the date of issue of invoice (or last date for issuing it) and the date the supplier receives paymentCorrect
  3. CThe date on which the goods are delivered to the recipient, in all cases
  4. DThe date on which the periodical return is filed by the supplier

Explanation

Section 12(2) fixes the time of supply of goods as the earlier of the invoice date (or the last date by which the invoice must be issued) and the date the supplier receives payment. The 'later of' option reverses the rule. Return filing date applies only as a residual rule when time cannot be determined otherwise.

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