Time of Supply (Advanced)

Time of Supply (Advanced) 2

This Module Includes

2.1 Introduction
2.2 Domestic Transactions including Reverse Charge
2.3 International Transactions including Reverse Charge
2.4 Case Studies / Analysis of Advance Rulings

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Time of Supply (Advanced)

SLOB Mapped against the Module
1. To develop detail understanding of various provisions of Goods and Services Tax (GST) to facilitate
valuation, computation of tax liability including management of input tax credit.
2. To obtain detail knowledge about the provisions under GST relating to accounts and record, annual returns
and dispute resolution to ensure better compliance.
3. To facilitate strategic decision making by appropriate management of various indirect tax issues.

Module Learning Objectives

After studying this module, the students will be able to:
~ Identify the point in time when the liability to pay GST arises on supply of goods or services under forward
charge
~ Identify the point in time when the liability to pay GST arises on supply of goods or services under reverse
charge including international transactions.
~ Explain time of supply for continuous supply, vouchers exchangeable for goods and services
~ Understand when the liability to pay GST arises on supply of goods and services in residual cases
~ Identify time of supply in case of interest, late fee/penalty paid for delay in payment of consideration
~ Understand the applicable rate of GST in case there is change in rate of GST in respect of supply of goods
or services
~ Understand practical issues relating to time of supply of goods and service.

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Introduction 2.1

I
t means the date on which the charging event has occurred. As a result, the rate of CGST/SGST or IGST or
UTGST will be decided in accordance with the time of supply. Based on time of supply we will also determine
the due date of payment of GST. In terms of section 39 of the CGST Act, 2017 every registered person who
is required to furnish a return shall pay tax to the Government the tax due as per return not later than the last
date on which he is required to furnish such return.

Section 12 and 13 of CGST Act, 2017

Time of Supply of Goods Time of Supply of Services

Section The liability to pay tax on goods shall Section The liability to pay tax on services shall
12(1) arise at the time of supply, as determined 13(1): arise at the time of supply, as determined
in accordance with the provisions of this in accordance with the provisions of this
section. section.
Section Time of Supply of Goods under Forward Section Time of Supply of Services under Forward
12(2) Charge. 13(2) Charge.
Section Time of Supply of Goods under Reverse Section Time of Supply of Services under Reverse
12(3) Charge. 13(3) Charge.
Section Time of Supply in case of Supply of Section Time of Supply in case of Supply of
12(4) Vouchers. 13(4) Vouchers.
Section Residuary Clause. Section Residuary Clause.
12(5) [where the time of supply cannot be 13(5) [where the time of supply cannot be
determined under sub-section (2) to sub- determined under sub-section (2) to sub-
section (4) of Section 12] section (4) of section 13]
Section The time of supply to the extent it relates to Section The time of supply to the extent it relates to
12(6) an addition in the value of supply by way 13(6) an addition in the value of supply by way
of interest, late fee or penalty for delayed of interest, late fee or penalty for delayed
payment of any consideration shall be the payment of any consideration shall be the
date on which the supplier receives such date on which the supplier receives such
addition in value. addition in value.

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Domestic Transactions
2.2
Including Reverse Charge
Time of Supply of Goods [Section 12(2) of CGST Act, 2017]:
The CBIC vide Notification No. 66/2017-Central Tax dated 15th November, 2017 notified that the registered
person who did not opt for the composition levy under section 10 of the CGST Act as the class of persons who
shall pay the central tax on the outward supply of goods at the time of supply as specified in clause (a) of sub-
section (2) of section 12 of the said Act including in the situations
attracting the provisions of section 14 of the said Act, and shall No GST on advance received against
accordingly furnish the details and returns as mentioned in supply of GOODs for ALL ASSESSEES
Chapter IX of the said Act and the rules made thereunder and (w.e.f. 15th November 2017):
the period prescribed for the payment of tax by such class of
registered persons shall be such as specified in the said Act.
Vide Notification No. 66/2017-Central Tax, dated 15 November 2017, this relaxation has been extended to
all persons, except persons opting to pay GST under composition scheme. It should be noted that this relaxation is
applicable only on the advances received post 15 November 2017 for supply of goods. Post this notification, the
time of supply for goods would be the date of issue of invoice by the supplier (or the due date, by when the invoice
needs to be issued). This would apply even in case of a change in rate of tax (i.e. section 14 of the CGST Act, 2017).
However, the supplier of services are required to pay GST at the time of receipt of advances.
w.e.f. 1-10-2023 Notification No. 50/2023: Amends Notification No. 66/2017 – CT Dated 15.11.2017 (which
provides for an exemption on advance received in case of supply of goods) to state that registered persons making
a supply of actionable claims as defined under Section 2(102A) will be liable to pay tax on advance received by
them.
The time of supply in case of supply of specified actionable claim shall be determined in accordance with section
12(2) [i.e. date of issue of invoice/ last date for issue of invoice OR, receipt of payment, whichever is earlier].
Example: M/s Pocker Pokiri Pvt. Ltd. Supplier of online money gaming registered person under GST located in
New Delhi. Supplied online money gaming (i.e. goods) on 1st January 2024 to Mr. Appavi of Chennai.
Case 1: Invoice issued on 1st February 2024 and payment received on 26th December 2023.
Case 2: Invoice issued on 1st February 2024 and payment received on 26th March 2024.
Find the time of supply in the above two cases?
Answer: Case 1: time of supply is 26th December 2023
Case 2: time of supply is 1st January 2024
*Invoice should have been issued as per Section 31(1)(a) or (b) of the CGST Act, 2017.

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In case of supplies in respect of which tax is paid or liable to be paid on Reverse Charge Mechanism, the time of
supply shall be the earliest of the following dates :
a. date of receipt of goods - in case of supply of goods or
b. date of payment as entered in the books of account of the recipient or the date on which the payment is
debited in his bank account, whichever is earlier or
c. 30 days from the date of issue of invoice – in case of supply of goods
d. 60 days from the date of issue of invoice – in case of supply of services
Note:
When it is not possible to determine the time of supply as per above, the date of entry in the books of account of
the recipient of supply to be taken as time of supply.

Example 1
C of Chennai registered person under GST supplies goods to B of Bengaluru. C has to send the goods for
delivery from Chennai to Bengaluru. C sends the goods to B on 30th October 20XX. Find the time of supply in the
following different scenarios:
Last Date Date on which Date on which
Date of Criteria for
Removal for Issue payment is payment is Time of
Issue of determining Time of
of Goods of Tax entered in the credited in the Supply
Invoice Supply
Invoice books of account Bank Account
30th Oct 30th Oct 30th Oct 31st Oct 1st Nov 30th Oct Date of issue of Invoice
30th Oct 2nd Nov 30th Oct 31st Oct 1st Nov 30th Oct Last Date for issue of
Invoice
30th Oct 28th Oct 30th Oct 27th Oct 26th Oct 28th Oct Date of issue of Invoice

Illustration 1
Mr. Ram registered person under GST sold goods to Mr. Ravi worth ` 5,00,000. The invoice was issued on 15th
November. The payment was received on 1st October. The goods were supplied on 20th November.
Find the time of supply of goods?
Solution:
Particulars Whichever is earlier
Date of issue of invoice 15th November
Last date on which invoice should have been issued 20th November
Date of receipt of payment (i.e. Advance) 1st October
Therefore, time of supply of goods = 15th November.

Time of supply for Composition Levy (Section 10 of the CGST Act, 2017):
A composition dealer will not have to pay any tax on advances received, if such advances pertain to his outward
supplies. The advances received and goods returned do not form part of taxable supplies and do not form part of the

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turnover in a State at the end of the quarter (i.e. tax period) for the purpose of computing turnover (Section 2(112)
of the CGST Act, 2017).
(a) Manufacturer is liable to pay CGST 0.5% of the Turnover in State or
(b) Supplier supplies restaurant services has to pay CGST @2.5% of the turnover in State or
(c) Dealer is liable to pay CGST 0.5% of the turnover of taxable supplies of goods in State or
In the above three cases Advance payment for outward supplies not taken into account.

Time of Supply of GOODS [Applicable to all subsections of Section 12 of CGST Act, 2017]

Example 2
C of Chennai supplies goods to M of Madurai. C has to send the goods for delivery from Chennai to Madurai. C
sends the goods to M on 30th May 2024. Turnover of C in the P.Y. was ` 2.50 crore. Find the time of supply in the
following different scenarios:
Date on which
Last Date Date on which
Date of payment is Criteria for
Removal for Issue payment is Time of
Issue of entered in determining Time
of Goods of Tax credited in the Supply
Invoice the books of of Supply
Invoice Bank Account
account
30th May 30th May 30th May 31st March 1st April 30th May Date of Issue of
Invoice
30th May 2nd June 30th May 31st May 1st April 30th May Last Date for Issue
of Tax Invoice
30th May 28th May 30th May 27th April 26thMarch 28th May Date of Issue of
Invoice

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Illustration 2
X & Co., being a trader receives an advance of ` 2,500/- on 29.11.2024 for goods worth ` 10,000/- to be supplied
in the month of January 2025.
Find the following:
(a) Time of supply
(b) Due date of tax liability.
(c) CGST and SGST liability.
Note: P.Y. turnover ` 0.80 crore. X & Co., opted to pay GST under Composition scheme.
Solution:
(a) Time of supply the date of invoice (i.e. Turnover basis) = January 2025
(b) Due date of tax liability 18th April 2025 (i.e. quarterly)
(c) CGST = ` 50/- (i.e. ` 10,000 × 0.5%) and SGST = ` 50/- (i.e. ` 10,000 × 0.5%)

The phrase “the date on which supplier receives the payment” or “the date of receipt of payment” means:
● the date on which payment is entered in his books of accounts
Or
● the date on which the payment is credited to his bank account,
whichever is earlier.
The supply shall be deemed to have been made to the extent it is covered by the invoice or, as the case may be,
the payment:
Illustration 3
X & Co., receives an advance of ` 2,500/- on 29.07.2024 for goods worth ` 10,000/- to be supplied in the month
of September 2024.
Find the following:
(a) Value of supply of goods in the month of July 2024
(b) Due date of tax liability for the month of July 2024.
Note: P.Y. turnover ` 1.80 crore.
Solution:
(a) Advance payment against supply of goods is treated as not a supply and hence no time of supply for ` 2,500/-
in the month of July 2024.
(b) No due date for the month of July 2024 in the given case.
An amount upto ` 1000/- in excess of the amount indicated on the tax invoice.

Time of supply =
● The date of issue of invoice.
Or
Date of receipt of payment.
● At the option of the supplier.

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Illustration 4
If a supplier of goods has received an amount of ` 1500/- against an invoice of ` 1100/- on 25.7.2024 and the date
of invoice of next supply to the said recipient is 14.8.2024.
Find the following in respect of excess amount over and above invoice value:
(a) Time of Supply of goods
(b) Due date of payment of tax.
Solution:
(a) Since, excess amount received over and above invoice value does not exceed ` 1,000, supplier has an option
to treat the time of supply w.r.t. ` 400/- either as 25.07.24 or 14.8.2024.
(b) Due date of payment of tax
● If Time of Supply = 25.7.2024, then due date is 20.8.2024
● If Time of Supply = 14.8.2024, then due date is 20.9.2024
Illustration 5
M/s X Ltd., being a manufacturer, sold goods to M/s Y Ltd., wholesaler, and issued invoice for the sale on
01-08-20XX.
Find the time of supply of goods in each of the following independent cases:
(i) M/s X Ltd., removes the goods for delivery to M/s Y Ltd., on 16th August 20XX.
(ii) M/s. Y Ltd., collects the goods from premises of M/s X Ltd., on 10th August 20XX.
(iii) M/s Y Ltd., made full payment on 26th July 20XX.
(iv) M/s Y Ltd., credited the payment in bank account of M/s X Ltd., on 28th July 20XX for 3/4th of goods,
M/s X Ltd., recorded the same as receipts in his books on 3rd August 20XX. The goods were dispatched
on 5th August 20XX from the warehouse.
Solution:
(i) 1st August 20XX is the time of supply of goods.
i.e. Earlier of the following:
● Date of Invoice - 1st August 20XX
or
● Date on which invoice is required to be issued - 16th August 20XX.
(ii) 1st August 20XX is the time of supply of goods.
i.e. Earlier of the following:
● Date of Invoice - 1st August 20XX
or
● Date on which goods is delivered - 10th August 20XX.
(iii) 1st Aug 20XX is the time of supply of goods
i.e. date of invoice:-
● Date of Invoice - 1st August 20XX
(iv) Time of supply is 1st August 20XX.

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Illustration 6
Part Advance payment is made or invoice issued is for part payment, whether the time of supply will cover the
full supply?
Solution:
The supply of services shall be deemed to have been made to the extent it is covered by the invoice or the part
payment. It means part advance payment is the time of supply.
However, for goods payment of tax will need to be made upon date of issue of invoice, irrespective of the fact
whether or not advance or part payment is received.
Illustration 7
M/s X Ltd, being a manufacturer, sold goods to M/s Y Ltd., wholesaler, and issued invoice for the sale on 01-
08-20XX.
Find the time of supply of goods in each of the following independent cases:
(i) M/s X Ltd., removes the goods for delivery to M/s Y Ltd., on 16th August 20XX.
(ii) M/s. Y Ltd., collects the goods from premises of M/s X Ltd., on 10th August 20XX.
(iii) M/s Y Ltd. made full payment on 26th July 20XX.
(iv) M/s Y Ltd., credited the payment in bank account of M/s X Ltd., on 28th July 20XX for 3/4th of goods,
M/s X Ltd., recorded the same as receipts in his books on 3rd August 20XX. The goods were dispatched
on 31st July 20XX from the warehouse.
Solution:
Time of supply on or after 15th November 20XX is as follows:
(i) Time of supply = Date of Invoice - 1st August 20XX.
(ii) Time of supply = Date of Invoice - 1st August 20XX.
(iii) Time of supply = Date of Invoice - 1st August 20XX.
(iv) Time of supply = Date of dispatch of goods (i.e. last date on which invoice might have been issued)–31st
July 20XX.
Note: For goods payment of tax will need to be made upon date of issue of invoice, irrespective of the fact
whether or not advance or part payment is received.
Continuous supply of goods

Time of Supply =
● Time when each statement is issued.
OR
● Time when each payment is received.
Whichever is earlier
Note: Section 31(4) of GST Act, 2017, the Invoice shall be issued before or at the time of such statement is issued
or, as the case may be each such payment is received.
In case of continuous supply of services: -
the time of supply shall be –
(i) Where the due date of payment is ascertainable from the contract:
The date on which the payment is liable to be made by the service receiver, whether or not any invoice has

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been issued or any payment has been received by the supplier of service;
(ii) Where the due date of payment is not ascertainable from the contract:
When the supplier of service receives the payment, or issues an invoice, whichever is earlier;
(iii) Where the payment is linked to the completion of an event:
The time of completion of that event;
Illustration 8
M/s Indian Oil Corporation entered into a contract with Mr. B to supply of oil throughout the year. M/s Indian
Oil Corporation issues monthly statement for the oil supplied to Mr. B.
Determine the time of supply of goods in following independent cases:
(i) Mr. B made payment for the month of July on 31st July, 20XX and M/s Indian Oil Corporation issued
statement for the month of July on 8th August, 20XX.
(ii) M/s Indian Oil Corporation issued statement for the month of August on 5th September, 20XX, the payment
of which not received till 30th September, 20XX.
Solution:
(i) 31st July 20XX will be the time of supply.
Earliest of the following:
● Date of Invoice: 8th August 20XX
● Last date on which invoice has to be issued:
Date of payment (31.07.20XX) or statement (08.08.20XX), whichever is earlier i.e. 31st July, 20XX.
(ii) 5th September 20XX will be the time of supply.
Earliest of the following:
● Date of Invoice: 5th September 20XX.
● Last date on which invoice has to be issued:
Date of payment (not known) or statement (05.09.20XX), whichever is earlier i.e. 5th September, 20XX.
Time of Supply of Services [Section 13(2) of GST]

Time of Supply of Services

Sec. 13(2) of GST In case of Banking /
NBFC/Insurer ≤45 Days

NO Invoice issued ≤30 Days from YES

supply of service Sec 31(2)

TIME OF SUPPLY = TIME OF SUPPLY =

● Date of provision of service ● Date of issue of Invoice.
OR OR
● DT. on which supplier receives the payment ● DT. on which supplier receives the payment
Whichever is earlier Whichever is earlier

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Excess payment upto ` 1000: Option of taking invoice date as time of supply:
In terms of the proviso to sub-section (2) of section 13, if payment received is upto ` 1,000 in excess of the
invoice value, the supplier can choose to take the related invoice date as the time of supply in relation to this
excess value.

Example 3
A telephone company receives ` 5000 against an invoice of ` 4800. The excess amount of ` 200 can be adjusted
against the next invoice. The company has the option to take the date of the next invoice as the time of supply of
service in relation to the amount of ` 200 received in excess against the earlier invoice.
Illustration 9
BSNL regularly issues invoices to the customers on 10th of the following month from the end of relevant month.
A invoice has been issued for ` 1,00,000 (exclusive of GST) on 10th October 20XX for the taxable services
provided to a customer from 1st September 20XX to 30th September 20XX. However, payment received from the
same customer for ` 1,00,950 on 31ST Oct 20XX.
Find the time of supply and due date of payment of GST only for the excess payment which is received over and
above invoice value.
Any invoice is required to issue for excess payment of ` 950 by BSNL?

Solution:
Time of supply for ` 950 = 10th November 20XX.
Due Date of payment is 20th December 20XX
Note: No need to issue any separate invoice in respect of such excess payment. Since, it is adjusted against
next invoice.

Illustration 10
On the basis of following information, determine the ‘Time of supply’ from the following: -
(1) Commencement of providing of service on 05-06-20XX
(2) Completion of service on 10-10-20XX
(3) Invoice issued on 20-10-20XX
(4) Payment received by cheque and entered in the books on 15-10-20XX
(5) Amount credited in Bank A/c on 25-10-20XX
(6) Service became taxable for the first time on 01-07-20XX

Solution:
Time of supply = 15-10-20XX
Date of payment = book entry or bank entry whichever is earlier (i.e. 15-10-20XX)
Date of invoice = 20-10-20XX (i.e. invoice issued within 30 days from the date of completion of service)
Hence, date payment or date of invoice whichever is earlier is the time of supply.

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Illustration 11
ABC & Co., a Chartered Accountants firm issued invoice for services rendered to Mr. Ram on 5th August 2024.
Determine the time of supply in following independent cases:
(i) The provisions of services were completed on 1st July 2024.
(ii) The provisions of services were completed on 15th July 2024.
(iii) Mr. Ram made the payment on 3rd July 2024, where provisions of services were remaining to be completed.
(iv) Mr. Ram made the payment on 15th August 2024, where provisions of services were remaining to
be completed.

Solution:
(i) 1st July 2024 will be the time of supply of services as invoice is not issued within the time frame of 30
days.
(ii) 5th August 2024 will be the time of supply of services as invoice is issued within the time frame.
(iii) 3rd July 2024 will be the time of supply of services as payment received before invoice date.
(iv) 5th August 2024 will be the time of supply of services as invoice is issued before the completion of
provisions of services.

The following treatment shall apply to TDR/FSI and Long-term lease for projects commencing after 1-4-
2019:
The supply of TDR, FSI, long term lease (premium) of land by a land owner to a developer shall be exempted
subject to the condition that the constructed flats are sold before issuance of completion certificate and tax is paid
on them. Exemption of TDR, FSI, long term lease (premium) shall be withdrawn in case of flats sold after issue of
completion certificate, but such withdrawal shall be limited to 1% of value in case of affordable houses and 5% of
value in case of other than affordable houses.
The liability to pay tax on TDR, FSI, long term lease (premium) shall be shifted from landowner to builder under
the Reverse Charge Mechanism (RCM).
The date on which builder shall be liable to pay tax on TDR, FSI, long term lease (premium) of land under RCM
in respect of flats sold after completion certificate is being shifted to date of issue of completion certificate or first
occupation of the project, whichever is earlier.
The liability of builder to pay tax on construction of houses given to land owner in a JDA is also being shifted to
the date of completion or first occupation of the project, whichever is earlier.
w.e.f. 1-10-2019: The CBIC vide Notification No. 23/2019-(CT Rate), dated September 30, 2019 has
put a retrospective sunset clause on applicability of Notification No. 04/2018- (CT Rate), dated January
25, 2018 w.r.t. development rights supplied on or after April 01, 2019. The later Notification provided special
procedure to be followed while determining time of supply in case of construction services against transfer of
development rights.
Circular No. 221/15/2024-GST dated 26 June 2024 -
Clarification on the time of supply regarding the supply of services of construction of road and maintenance
thereof under the National Highway Projects of National Highways Authority of India (NHAI) in the Hybrid
Annuity Mode (HAM) model:

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The circular has clarified the issue of the Time of Supply

for the purpose of payment of tax on the deferred annuity
payments received by the concessionaire from NHAI for the
construction of road and operation and maintenance (O&M)
thereof under the HAM model.
In HAM contracts, a certain portion of payment linked
to construction is payable during the construction and the
remaining payment is received in instalments over the
concession period as per the payment schedule. However, the
revenue authorities have been advancing the view that GST is
payable on the percentage of construction completion method.
The circular has clarified the time of supply provisions mainly
considering that the HAM contract should be considered
holistically as a single contract for both construction and
O&M services. It cannot be artificially split based on payment
terms.
The following clarifications have been provided.
a. The tax liability on the concessionaire under the HAM contract, including on the balance portion linked to the
construction portion will arise at the time of issuance of invoice or receipt of payment, whichever is earlier [if
the invoice is issued on or before the specified date or date of completion of the event specified in the contract].
b. If the invoices are not issued on or before the specified date or date of completion of the event as specified in
the contract, the tax liability will arise on the date of provision of the said service or date of receipt of payment
whichever is earlier.
c. Instalments or annuity payable by NHAI to the concessionaire includes the interest component. The interest
amount should also be includible in the taxable value for the purpose of payment of tax on the annuity or
instalment in terms of section 15(2)(d) of the CGST Act.
Comprehensive Example: Time of Supply for Deferred Annuity Payments under HAM Model:
Project Details
1. Concessionaire: XYZ Infra Ltd. (Supplier of service)
2. Authority: National Highways Authority of India (NHAI) (Recipient of the service)
3. Project Value: ₹1,000 crores
4. HAM Model Payment Terms:
• Construction Phase (2 years):
40% of the project cost (₹400 crores) to be paid in milestone-based instalments, meaning the due date of
payment is linked to the completion of specific events.
• Deferred Annuity Phase (15 years):
Remaining 60% (₹600 crores) to be paid as annual instalments, including interest. The due date of payment,
as mentioned in the contract, is 1st April every year.
• Annual Instalment: ₹50 crores (₹40 crores principal + ₹10 crores interest).

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Application of Time of Supply Rules

As per Section 13(2) of the CGST Act for continuous supply of services:
1. If the invoice is issued within the specified time (on or before the due date of payment linked to the completion
of an event):
• The time of supply is the earlier of the date of issue of the invoice or the date of receipt of payment.
2. If the invoice is not issued within the specified time:
• The time of supply arises on the date of provision of service or the date of receipt of payment, whichever
is earlier.
Phase 1: Construction Phase
Scenario 1: First Milestone Payment
• Milestone Completed: 25% of construction completed on 31st December 2024.
• Invoice Raised: 5th January 2025 for ₹100 crores (25% of ₹400 crores).
• Payment Received: 15th January 2025.
Time of Supply Determination:
• Since the invoice was not issued within the specified time (on or before 31st December 2024), the time of
supply is 31st December 2024 (date of milestone completion).
Scenario 2: Second Milestone Payment
• Milestone Completed: 75% of construction completed on 1st April 2025.
• Invoice Raised: 31st March 2025 for ₹300 crores (75% of ₹400 crores).
• Payment Received: 15th May 2025.
Time of Supply Determination:
• Since the invoice was issued on or before the due date of payment (1st April 2025), the time of supply is 31st
March 2025 (date of invoice).
Phase 2: Deferred Annuity Payments
Scenario: First Annuity Payment
• Annuity Payment Due: ₹50 crores (₹40 crores principal + ₹10 crores interest).
• Service Period Covered: 1st April 2025 to 31st March 2026.
• Invoice Raised: 1st April 2026.
• Payment Received: 10th April 2026.
Time of Supply Determination:
• Since the invoice was issued on or before the due date of payment (1st April 2026), the time of supply is 1st
April 2026 (date of invoice).
Taxable Value: ₹50 crores (including ₹10 crores interest).
GST Computation (Assuming 18%):
• GST = ₹50 crores × 18% = ₹9 crores.
• Due date for tax payment: 20th May 2026.

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Phase 3: O&M Services

Scenario: Quarterly O&M Payment
• Service Provided: January to March 2026.
• Due Date of Payment: 10th April 2026 (as per the contract).
• Invoice Raised: 31st March 2026 for ₹5 crores.
• Payment Received: 10th April 2026.
Time of Supply Determination:
• Since the invoice was issued on or before the due date of payment (10th April 2026), the time of supply is 31st
March 2026 (date of invoice).
Taxable Value: ₹5 crores.
GST Computation (Assuming 18%):
• GST = ₹5 crores × 18% = ₹0.9 crores.
• Due date for tax payment: 20th April 2026.
Summary of GST Liability

Taxable Value GST Time of Due Date for

Phase Event
(₹ Crores) (₹ Crores) Supply Tax Payment
Construction 25% Milestone 100 18 31st December 20th January
(Milestone 1) Completion 2024 2025
Construction 75% Milestone 300 54 31st March 20th April
(Milestone 2) Completion 2025 2025
Deferred Annuity First Annual Instalment 50 9 1st April 2026 20th May
Payment 2026
O&M Services Quarterly Maintenance 5 0.9 31st March 20th April
(Jan-Mar) 2026 2026
Key Points:
1. Deferred Annuities: Time of supply is aligned with invoice issuance or payment, ensuring clarity for GST
compliance.
2. Interest Component: Interest is includible in the taxable value.
3. Unified Contract: Construction and O&M services are treated as a single supply, avoiding artificial splitting
of GST liability.
4. Continuous Supply of Services: Provisions ensure GST compliance without ambiguity regarding phased
payments.
Circular No. 222/16/2024GST dated 26 June 2024 -
Clarification on the time of supply of services of spectrum usage and other similar services under GST
The circular clarifies the time of supply for the GST payment on spectrum allocation services when the telecom
operator opts for deferred payment in instalments. The spectrum allocation service provided by the Department
of Telecommunications (DoT) is treated as a continuous supply of services under section 2(33) of the CGST Act.

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The circular clarifies that the Frequency Assignment Letter issued by the DoT which details the auction results and
payment options, is not considered as an invoice but it is only a bid acceptance document.
Hence, the GST liability arises at the time the instalment payments are due or made, whichever is earlier.
GST is payable on these spectrum allocation services under reverse charge
mechanism as per Notification No. 13/2017-Central Tax (Rate) dated 28th
June, 2017.
Time of Supply under different Payment Options:
• Upfront Payments: GST is payable when the upfront payment is made
or due, whichever is earlier.
• Deferred Payments: GST is payable on deferred payments as and when
they are due or made, whichever is earlier.

Example: Time of Supply for Spectrum Allocation Services

Scenario Overview
1. Service Provided: Spectrum allocation services by the Department of Telecommunications (DoT) to a telecom
operator.
2. Payment Mechanism: Reverse charge mechanism (RCM) as per Notification No. 13/2017-Central Tax (Rate)
dated 28th June 2017.
3. Payment Options: The telecom operator can choose between upfront payment or deferred payment in
instalments.
Case 1: Upfront Payment
• Details:
• Spectrum Allocation Value: ₹500 crores.
• Payment Due Date: 1st July 2024.
• Payment Made: 25th June 2024.
Time of Supply Determination:
• Under Section 13(2) of the CGST Act, the time of supply is earlier of:
• Due Date of Payment: 1st July 2024.
• Actual Payment Date: 25th June 2024.
Time of Supply: 25th June 2024.
GST Payable Date: 20th July 2024 (due by the 20th of the following month under RCM).
Case 2: Deferred Payment
Scenario: First Instalment
• Details:
• Spectrum Allocation Value: ₹500 crores, divided into 5 annual instalments of ₹100 crores each.

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• First Instalment Due Date: 1st July 2024.

• Payment Made: 15th July 2024.
Time of Supply Determination:
• Under Section 13(2) of the CGST Act, the time of supply is earlier of:
• Due Date of Payment: 1st July 2024.
• Actual Payment Date: 15th July 2024.
Time of Supply: 1st July 2024.
GST Payable Date: 20th August 2024 (due by the 20th of the following month under RCM).
Scenario: Subsequent Instalments
• Second Instalment Details:
• Due Date: 1st July 2025.
• Payment Made: 1st June 2025.
Time of Supply Determination:
• Time of supply is earlier of:
• Due Date of Payment: 1st July 2025.
• Actual Payment Date: 1st June 2025.
Time of Supply: 1st June 2025.
GST Payable Date: 20th July 2025.
Key Notes
1. Reverse Charge Mechanism (RCM): The telecom operator is liable to pay GST on the spectrum allocation
services under RCM.
2. GST Rate: Applicable GST rate for spectrum services is assumed to be 18%.
Summary of GST Liability

Payment Amount Time of GST Payable

Case Payment Type GST Due Date
(₹ Crores) Supply (₹ Crores)
Upfront Payment Full Payment 500 25th June 2024 90 20th July 2024
Deferred First Instalment 100 1st July 2024 18 20th August
Payment (Year 1) 2024
Deferred Second Instalment 100 1st June 2025 18 20th July 2025
Payment (Year 2)

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International Transactions
2.3
including Reverse Charge
Time of Supply of Goods & Services (i.e. Reverse Charge):

Time of Supply of Goods & Services

(in case of Reverse Charge)

Supply of Goods u/s Supply of Services u/s

12(3) of GST Act, 2017 13(3) of GST Act, 2017

The date of payment Associated Enterprises Other cases:

as entered in the books Date (Supplier of service ● Date of payment
of account of the Immediately located outside India): Or
The recipient following 30 ● Date of entry in the ● Date immediately
date of Or days from the books of account following 60 days
receipt The date on which the date of issue of the recipient of from the date of
of goods payment is debited of invoice by supply issue of invoice
in his bank account, the supplier OR by the supplier
whichever is earlier. ● The date of payment

Whichever is earlier Whichever is earlier

If time of supply cannot be determined with the help of above provisions, then the time of supply shall be the date
on which entry in the books of the recipient of goods & services is made.
w.e.f. 1-11-2024, F.A. 2024 dt. 16-8-2024, Amendment of section 13. - In section 13 of the Central Goods and
Services Tax Act, in sub-section (3):
(i) in clause (b), for the words “by the supplier:”, the words “by the supplier, in cases where invoice is required to
be issued by the supplier; or” shall be substituted;

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(ii) after clause (b), the following clause shall be inserted, namely:–– “(c) the date of issue of invoice by the
recipient, in cases where invoice is to be issued by the recipient:”;
(iii) in the first proviso, after the words, brackets and letter “or clause (b)”, the words, brackets and letter “or clause
(c)” shall be inserted.
Section 13(3) after amendment is as follows:
In case of supplies in respect of which tax is paid or liable to be paid on reverse charge basis, the time of supply
shall be the earlier of the following dates, namely :—
(a) the date of payment as entered in the books of account of the recipient or the date on which the payment is
debited in his bank account, whichever is earlier; or
(b) the date immediately following sixty days from the date of issue of invoice or any other document, by whatever
name called, in lieu thereof by the supplier, in cases where invoice is required to be issued by the supplier; or:
“(c) the date of issue of invoice by the recipient, in cases where invoice is to be issued by the recipient:”
Provided that where it is not possible to determine the time of supply under clause (a) or clause (b) or clause (c),
the time of supply shall be the date of entry in the books of account of the recipient of supply :
Provided further that in case of supply by associated enterprises, where the supplier of service is located outside
India, the time of supply shall be the date of entry in the books of account of the recipient of supply or the date of
payment, whichever is earlier.

Illustration 12
Mr. A, a registered person received goods (i.e. Bidi leaves) from Mr. B, an unregistered dealer. Mr. B issues
invoice on 1st July 2024.
Find the time of supply of goods in following independent cases:
(i) Mr. A received goods on 15th July 2024, payment of which is not made yet.
(ii) Mr. A received goods on 3rd August 2024 & made payment for the same on 4th August 2024.
(iii) Mr. A made payment on 8th July and received goods on the same date.
(iv) Mr. A received goods on 10th July 2024 & made payment for the same on 9th July 2024.

Solution:
(i) Time of supply of goods = 15-07-2024
Earliest of the following:
Receipt of Goods = 15-07-2024
Date of Payment = not paid
Date immediately following 30 days from the date of invoice = 01-08-2024
(ii) Time of supply of goods = 01-08-2024
Earliest of the following:
Receipt of Goods = 03-08-2024
Date of Payment = 04-08-2024
Date immediately following 30 days from the date of invoice = 01-08-2024

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(iii) Time of supply of goods = 08-07-2024

Earliest of the following:
Receipt of Goods = 08-07-2024
Date of Payment = 08-07-2024
Date immediately following 30 days from the date of invoice = 01-08-2024
(iv) Time of supply of goods = 09-07-2024
Earliest of the following:
Receipt of Goods = 10-07-2024
Date of Payment = 09-07-2024
Date immediately following 30 days from the date of invoice = 01-08-2024
Illustration 13
C Ltd., a registered firm received services from a Raman & Co., an Advocate firm, an unregistered person.
The firm issued invoice to C Ltd. on 1st July 2024. Determine the time of supply of services in the following
independent cases:
(i) C Ltd. made the payments to the firm on 15th August 2024.
(ii) C Ltd. made the payments to the firm on 11th September 2024.
Note: C Ltd turnover in the preceding financial year was ` 2 crore
Solution:
(i) Time of supply of service = 15-08-2024
Note: as payment made earlier than the date immediately following 60 days from date of issue of invoice.
(ii) Time of supply of service = 31-08-2024
Note: as payment made after the date immediately following 60 days from date of issue of invoice.
Illustration 14
X Ltd. (India) & Y Ltd. (London) is associated enterprises. X Ltd., a registered firm received the services of Y
Ltd., an unregistered firm. Determine the time of supply in following cases:
(i) X Ltd. recorded the liability in the books on 15th January 2025 and payment will be made in the next month.
(ii) X Ltd. made advance payment to Y Ltd. on January 2025 and recorded liability in the books on 15th May
2025.
Solution:
(i) Time of supply =15-01-2025
Note: as the date of entry in the books is prior to the date of payment.
(ii) Time of supply = 10-01-2025
Note: as the payment is made earlier to the date of entry in the books.

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Goods sent for approval:

TIME OF SUPPLY=
● Time when it becomes known that supply is taken place.
OR
● Six months from the date of removal.
Whichever is earlier

Illustration 15
Mr. A (registered person under GST) sends goods to Mr. B (registered person under GST) on approval basis on
20th January 2025.
Find the time of supply in the following independent cases:
(a) If Mr. B. accept the goods on 10th February 2025.
(b) If Mr. B accepts the goods on 1st September 2025.
(c) If Mr. B returns the goods on 10th February 2025.
(d) If Mr. B return the goods on 1st September 2025.

Solution:
Sl.
Particulars Time of supply Remarks
No.
(a) Mr. B. accept the goods 10th February 2025 Time when it becomes known that supply is
on 10th February 2025. taken place (i.e. 10th Feb 2025)
OR
Six months from the date of removal (i.e.
20th July 2025)
Whichever is earlier
(b) Mr. B accepts the goods 21st July 2025 1st day after expiry of 6 months from the
on 1st September 2025. date of removal.
(c) Mr. B returns the goods Not applicable No tax will be payable. Since, goods returned
on 10th February 2025. within six months from the date of dispatch.
(d) Mr. B return the goods Mr. A Mr. B GST will be payable as the return is after 6
on 1st September 2025. months from date of dispatch. Both Mr.A and
21st July 1st September
Mr. B are liable to pay GST.
2025 2025

Time of Supply of Vouchers for Goods & Services [Section 12(4) & 13(4) of CGST Act, 2017]

If the supplies is identifiable at that point:

● Time of supply = Date of issue of voucher.

If the supplies is not identifiable at that point:

● Time of supply = The date of redemption of voucher.

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Illustration 16
Reliable Industries a readymade garment manufacturer issued the voucher on 10-07-2024 to their prospective
customer for enabling them to buy readymade garments manufactured by them from their shop. Customer purchased
readymade garments on 20th Aug 2024.
Find the time of supply of goods?
Solution:
Time of supply of goods = 10-07-2024
Note: time of supply will be the issuance of the voucher. Since, the voucher is identifiable with the goods.
Illustration 17
Shopper’s Stop store a large retailer who sells various types of products like readymade garment, jewellery,
cosmetics, fabrics, shoes etc., issued the voucher on 10-07-2024 to their prospective customer for enabling them to
buy any product from their shop. Customer purchased readymade garments on 20th August, 2024.
Find the time of supply of goods?
Solution:
Time of supply of goods = 20-08-2024
Note: time of supply will be the date of encashment of voucher (i.e. Redemption of voucher). Since, the voucher
is not identifiable with any specific product.
Time of supply of goods or services (Residual provisions) [Section 12(5) and Section 13(5) of the CGST
Act, 2017]:
In case it is not possible to determine the time of supply under aforesaid provisions, the time of supply is:

● Due date of filing of return, in case where periodical return has to be filed.

● Date of payment of tax in all other cases

Time of supply of goods or services related to an addition in the value of supply by way of interest, late
fees or penalty [Section 12(6) and Section 13(6) of the CGST Act, 2017]:
Illustration 18
Mr. X being a supplier receives consideration in the month of September 2024, instead of due date of July 2024,
and for such delay he is eligible to receive an interest amount of ` 1,000/- and the said amount is received on
15.12.2024.
Find the time of supply for the interest portion and due date of payment.
Solution:
The time of supply = 15.12.2024
i.e. the date on which it is received by the supplier and
Due date of tax liability = 20.01.2025
No GST on advance received against supply of GOODs for ALL ASSESSES (w.e.f. 15th November 2017):
The CBIC vide Notification No. 66/2017-Central Tax, dated 15th November 2017, pay the central tax on the

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outward supply of goods at the time of supply as specified in clause (a) of sub-section (2) of section 12 of the said
Act including in the situations attracting the provisions of section 14 of the said Act.
Change in Rate of Tax in respect of supply of goods Sec. 14 of the CGST Act, 2017, w.e.f. 15.11.2017:
Notwithstanding anything contained in section 12, the time of supply, where there is a change in the rate of tax in
respect of goods, shall be determined in the following manner, namely:––

Supply is Payment
Invoice Time of supply
completed received before
Sl. issued before Applicable rate
before the the date of NT 66/2017-CT, dated
No. the date of of tax
change in rate change in tax 15.11.2017)
change in tax
of tax rate
1. Yes No No Date of issue of Invoice New Rate of Tax
2. Yes Yes No Date of issue of invoice Old Rate of tax
3. Yes No Yes Date of issue of Invoice Old Rate of tax
4. No Yes Yes Date of issue of Invoice Old Rate of Tax
5. No Yes No Date of issue of Invoice New Rate of tax
6. No No Yes Date of issue of Invoice New Rate of tax

Example 4
Rate of GST reduced from 28% to 18% w.e.f. 15th November 2024.
Before – Event occurred before November 15, 2024
After – Event occurred on or after November 15, 2024
Find the rate of tax to be applied on the following supplies?

Supply Provided Invoice issued Payment received Answer: GST Rate

Before After After 18%

Before Before After 28%
Before After Before 28%
After Before After 18%
After Before Before 28%
After After Before 18%

Change in Rate of Tax in respect of supply of services Sec. 14 of the CGST Act, 2017 w.e.f. 15.11.2017:
Notwithstanding anything contained in section 13, the time of supply, where there is a change in the rate of tax
in respect of services, shall be determined in the following manner, namely:––

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Supply is Invoice
Payment received
Sl. completed before issued before Applicable
before the date of Time of supply
No. the change in the date of rate of tax
change in tax rate
rate of tax change in tax
1. Yes No No Earliest of the date of New Rate of
invoice or payment Tax
2. Yes Yes No Date of issue of invoice Old Rate of tax
3. Yes No Yes Date of receipt of Old Rate of tax
payment
4. No Yes Yes Earliest of the date of Old Rate of Tax
invoice or payment
5. No Yes No Date of receipt of New Rate of tax
payment
6. No No Yes Date of issue of Invoice New Rate of tax

Date of receipt of payment in case of change in rate of tax

Normally the date of receipt of payment is the date of credit in the bank account of the recipient of payment or
the date on which the payment is entered into his books of account, whichever is earlier.
However, in cases of change in rate of tax, the date of receipt of payment is the date of credit in the bank
account if such credit is after four working days from the date of change in rate of tax.
Date of receipt of payment in case of change in rate of tax:

Date of Payment

Amount is credited to the bank account ≤ 4 Amount is credited to the bank account > 4
working days after the date of such change working days after the date of such change

Date of Book Entry Date of Bank Entry Date of Bank Entry

Whichever is earlier

Illustration 19
X Pvt. Ltd. engaged in providing taxable services by way of training and coaching activities in relation of

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information Accounting and Auditing since, 1st July 2017 has the following details in respect of that activity for
the month of September, 2024:

Date of issuance invoice Date on which payment received Amount in (`)

16.09.2024 03.10.2024 2,50,000
20.10.2024 06.10.2024 25,000
02.10.2024 30.09.2024 1,25,000
The date of change in effective rate of tax in this case is 01-10-2024 from 12% to 18%. These services are
rendered in August 2024. Find the Time of Supply of service, effective rate of tax and due date of payment of tax.

Solution:
Date of Date on which Time of supply
Services Amount in Effective Due date of
issuance payment
rendered ( `) of service Rate of tax payment
invoice received
Aug 2024 16.09.2024 03.10.2024 2,50,000 16.09.2024 12% 20.10.2024
Aug 2024 20.10.2024 06.10.2024 25,000 06.10.2024 18% 20.11.2024
Aug 2024 02.10.2024 30.09.2024 1,25,000 30.09.2024 12% 20.10.2024

Illustration 20
A machine has to be supplied at site. It is done by sourcing various components from vendors and assembling the
machine at site. The details of the various events are:

17th September Purchase order with advance of ` 50,000 is received for goods worth ` 12 lakh and
entry duly made in the seller’s books of account.
20th October The machine is assembled, tested at site, and accepted by the buyer
23rd October Invoice raised
4th November Balance payment of ` 11,50,000 received
Determine the time of supply(ies) in the above scenario.

Solution:
For Advance payment: No Time of supply
For entire amount of ` 12 lakh:
Time of supply = 20th October
Working note:
(i) sale taken place on 20th October
(ii) Invoice is issued on 23rdOctober (however, last date to issue invoice is 20th October)
Whichever is earlier.

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Illustration 21
A machine has to be supplied at site. It is done by sourcing various components from vendors and assembling the
machine at site. The details of the various events are:

17th September Purchase order with advance of ` 25,000 is received for goods worth ` 10 lakh and
entry duly made in the seller’s books of account.
20th October The machine is assembled, tested at site, and accepted by the buyer
23rd October Invoice raised
4th November Balance payment of ` 9,75,000 received
Determine the time of supply(ies) in the above scenario.
Note: Turnover for the year 2025-26 as per records of supplier is ` 41 lakhs and not opted composition scheme.

Solution:
Time of supply for the entire value of ` 10 lakh = 20th October
Note: As per Section 31(1)(b) of the CGST Act, 2017 last date to issue invoice is 20th October.

Illustration 22
Gas is supplied by a pipeline. Monthly payments are made by the recipient as per contract. Every quarter, invoice
is issued by the supplier supported by a statement of the goods dispatched and payments made, and the recipient
has to pay the differential amount, if any. The details of the various events are:

August 5, September 5, October 6 Payments of ` 2 lakh made in each month

October 3 Statement of accounts issued by supplier, with invoice for the quarter
July - September
October 17 Differential payment of ` 56,000 received by supplier for the quarter
July – September as per statement of accounts
Determine the time of supply.
P.Y. turnover (2024-25) of the supplier is ` 200 lakh.

Solution:
Time of supply for payments of ` 2 lakh made in each month
● August 5,
● September 5,
● October 6
Time of supply for differential payment of ` 56,000:
● October 3
Note:
(i) Date of invoice for the quarter July to Sep = 3 October
(ii) Payment received in October 6, is belongs to Oct – Dec quarter, for which invoice is yet to issue.

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(iii) Continuous supply of goods

TIME OF SUPPLY=
● Time when each statement is issued.
OR
● Time when each payment is received.
Whichever is earlier

Section 31(4) of GST Act, 2017, the Invoice shall be issued before or at the time of such statement is issued
or, as the case may be each such payment is received.

Illustration 23
Determine the time of supply from the given information:

May 4 Supplier invoices goods taxable on reverse charge basis to Bridge & Co.
May 12 Bridge & Co. receives the goods
May 30 Bridge & Co. makes the payment

Solution:
Time of supply = May 12
Working note:
(i) Date of payment = May 30
(ii) 1st Day that occur after expiry of 30 days from
date of invoice = June 4
(iii) Date of receipt of goods = May 12
whichever is earlier.

Illustration 24
Determine the time of supply from the given information:

May 4 Supplier invoices goods taxable on reverse charge basis to Pillar & Co.
June 12 Pillar & Co. receives the goods, which were held up in transit
July 3 Pillar & Co. makes the payment

Solution:
Time of supply = June 4
Working note:
(i) Date of payment = July 3
(ii) 1st Day that occur after expiry of 30 days
from date of invoice = June 4

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(iii) Date of receipt of goods = June 12

whichever is earlier.

Illustration 25
Determine the time of supply from the following particulars:

6th May Booking of convention hall, sum agreed ` 15,000, advance of ` 3,000 received
15th September Function held in convention hall
27th October Invoice issued for ` 15,000, indicating balance of ` 12,000 payable
3rd November Balance payment of ` 12,000 received

Solution:
Time of Supply for ` 3,000 = 6th May
Time of Supply for the balance ` 12,000 = 15th September
Note: As per section 31 read with rule 47 of CGST Rules, the tax invoice is to be issued within 30 days of supply
of service. In the given case, the invoice is not issued within the prescribed time limit. As per section 13(2)(b), in a
case where the invoice is not issued within the prescribed time, the time of supply of service is the date of provision
of service or receipt of payment, whichever is earlier.

Illustration 26
Determine the time of supply in the following cases assuming that GST is payable under reverse charge:
Sl. Date of receipt Date of payment by Date of issue of invoice
Time of supply
No. of goods recipient of goods by supplier of goods
(i) July 1 August 10 June 29 July 1
(ii) July 1 June 25 June 29 June 25
(iii) July 1 Part payment made on June June 29 June 30 for part payment
30 and balance amount paid made and July 1 for
on July 20 balance amount
(iv) July 5 Payment is entered in the June 1 June 28 (i.e., when
books of account on June payment is entered in the
28 and debited in recipient’s books of account of the
bank account on June 30 recipient)
(v) July 1 Payment is entered in the June 29 June 26 (i.e., when
books of account on June payment is debited in the
30 and debited in recipient’s recipient’s bank account)
bank account on June 26
(vi) August 1 August 10 June 29 July 30 (i.e., 31st day
from issuance of invoice)

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Illustration 27
Determine the time of supply from the given information. (Assuming that service being supplied is taxable under
reverse charge)

May 4 The supplier of service issues invoice for service provided. There is dispute about
amount payable, and payment is delayed.
August 21 Payment made to the supplier of service
Solution:
Here, July 4 will be the time of supply, being the earliest of the two stipulated dates namely, date of payment and
date immediately following 60 days since issue of invoice.
Illustration 28
An income tax and money laundering case against Mr. X, working in a company, reveals a large volume of
undisclosed assets, which he claims as service income. On this basis, the GST authorities investigate the GST
liability. Dates of provision of service, whether in the first half or the second half of the financial year being
scrutinized by income-tax authorities, are not known. Mr. X voluntarily pays GST during the investigation.
What is the time of supply of the services?
Solution:
Where it is not possible to determine the time of supply in terms of date of invoice or date of provision of service
or date of receipt of payment or date of receipt of services in the books of account of the recipient, and where
periodical return is not to be filed (Mr. X, being an employee in a company, is not a registered person), the date of
payment of tax is taken as the time of supply [Section 13(5)(b)].
Therefore, the date when Mr. X pays the GST will be the time of supply.
Illustration 29
Royal Sweet Co., Delhi, a registered supplier, has furnished the details of the following few transactions which
took place in November, 2024:
Assume the rates of taxes to be as under:—

Sl. Date of Date of

Particulars Amount (`)
No. payment invoice
(i) 11.11.2024 Payment made to an advocate in Delhi 07.07.2024 1,25,000
(ii) 20.11.2024 Paid sitting fee to Director from Haryana for meeting 15.10.2024 75,000
held in Delhi on 15.10.2024 [Inter-State supply]

Particulars Rate
CGST 9%
SGST 9%
IGST 18%
You are required to compute GST [CGST & SGST/IGST, as the case may be] along with time of supply of the
aforementioned activities.
Note: GST paid to the Govt. Department on 20th December 2024 for the above (i) and (ii) above.

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Solution:
Computation of GST payable for the month of November, 2024
Sl. Time of supply CGST SGST IGST Interest
Particulars
No. of services (`) (`) (`) (`)
(i) Services from an advocate in Delhi 6th Sep 2024 11,250 11,250 Nil 677
(ii) Director’s Sitting fee 20th Nov 2024 Nil Nil 13,500 Nil
Interest = 22,500 × 18% × 61/365 = ` 677/-
Due date of payment tax is 20th Oct 20XX.
No. of days delay
Oct 2024 11 Days
Nov 2024 30 Days
Dec 2024 20 Days
Total No. of days delay 61 Days
Illustration 30
Somnath Industries Ltd. (SIL) is an Indian Company. It has received taxable services from a UK based company-
George Ltd. on 1-1-2025. George Ltd. raised on SIL an invoice of £45,000 on 27-1-2025. SIL debited its books of
accounts on 7-2-2025 and made the payment on 25-3-2025.
George Ltd. and SIL are associated enterprises.
Find the time of supply in the following independent cases:
(a) George Ltd. and SIL are associated enterprises.
(b) George Ltd. and SIL are non-associated enterprises.
(c) George Ltd. and SIL are associated enterprises but both of them located in taxable territory
Solution:
(a) Time of supply = 07-02-2025
(b) Time of supply = 25-03-2025
(c) Time of supply = 27-01-2025
Illustration 31
Mr. M a registered person, provides the following information in respect of his regular customer, Mr. S.

Date Particulars Amount (`)

01.10.2024 Supply of goods 35,700
01.10.2024 Date of invoice 35,700
18.10.2024 Receipt of payment 36,000
Find the time of supply for excess payment over and above invoice value.
Solution:
The time of supply in respect of the excess payment of ` 300 shall be at the option of Mr. M is as follows:

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Option 1: Time of supply = 01.11.2024 (i.e. Date of next invoice)

Option 2: Time of supply = 18.10.2024 (i.e. Date of receipt of excess payment)
Illustration 32
Cell Two Ltd., a registered person, provides the following information in respect of its regular customer,
Mr. Piyush:

Date Particulars Amount (`)

01.10.2024 Supply of service for the month of September 2024 845
01.10.2024 Date of invoice 845
18.10.2024 Receipt of payment 1,000
Find the time of supply for excess payment over and above invoice value.
Solution:
Time of supply at the option of the supplier:
Option 1: The time of supply in respect of the excess payment of ` 155 at the option of Cell Two Ltd., shall be
01.11.2024 (i.e. the date of the next monthly invoice) or
Option 2: Time of supply = 18.10.2024 (i.e. the date of receipt of payment).
Illustration 33
Determine the time of supply from the following particulars:

8th September Community hall booked for a marriage, Sum agreed ` 11,20,000, Advance ` 1,20,000
recorded in the books of account.
10th September Advance amount credit in bank account
2nd November Marriage held in Community Hall
18th December Invoice issued for ` 11,20,000 indicating the balance of ` 10,00,000 payable
22nd December Balance ` 10,00,000 recorded in the books of account.
24th December Payment ` 10,00,000 credit to the bank account
Solution:
Date of payment for advance = Bank entry or Book entry, whichever is earlier
Therefore, date of payment (for advance) in the given case = 8th September
Date of completion of service = 2nd November
(Invoice date not relevant. Since, it is issued after 30 days from the date of completion of service).
Date of payment for balance amount = Bank entry or Book entry, whichever is earlier
Therefore, date of payment (for balance) in the given case = 22nd December
Whichever is earlier.
Time of supply for Advance of ` 1,20,000 is 8th September
Time of supply for balance of ` 10,00,000 is 2nd November

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Case Studies / Analysis of

2.4
Advance Ruling
Solved Case 1
CMA & Associates provided Cost Audit Services to its client named M/s Wealth & Co. The supply was completed
on 15th May. As the pandemic situation had arisen all over the state, the partner of the Firm, Mr. X requested the
Director of the Company, Mr Pritam to make the payment of the professional service rendered and informed that
invoice shall be issued when the condition stabilises. On getting request from the Partner, the payment for the Audit
Services availed was released on 25th May. The GST rate applicable till 30th May was 18%
Due to adverse conditions and engagement in other audit services by the Firm, the invoice was raised after
one month i.e. 15th June. However, at the GST council meeting the rate of GST got increased by 2% i.e. 20%.
Determine the Time of Supply and the rate applicable.

Solution:
In the given case, CMA & Associates had provided the audit services on 15th May which is before the change
n rate of GST on 1st June. Thus, the Time of Supply shall be the earlier of Date of Invoice or Date of Payment as
under

Case Answer
Payment received on 25th May
Invoice raised on 15th June
Time of Supply – payment received date or invoice raised date whichever is earlier 25th May
Tax Rate 18%

Solved Case 2
Determine the Time of Supply from the following particulars

08th September Mr. X booked a room in J W Marriott for 01 night at room rent of ` 120000 per night. An
advance of ` 20000 was paid in advance and this amount was recorded in books of account
10th September Mr. X got a confirmation message from the Bank that the amount of `20000 being paid to J
W Marriott has been debited from the balance amount
02nd November Mr. X stays in the room for 01 night and gives instruction to issue the invoice for the
balance amount at the time of checkout from the Hotel.
As the server of the Hotel got jammed, the Manager gave assurance that when the same will
be set, the invoice shall be raised and the payment can be done on that date

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18th December It was fortunate that Manager was able to raise an invoice on this day. An invoice was raised
for ` 120000 for one night on Mr X. The invoice also stated that about the advance of `
20000 and balance being shown as outstanding of `100000 which was payable by Mr X to
the Hotel
22nd December Mr X on receipt of the invoice issued a cheque of ` 100000 in the name of Hotel
24th December The amount of ` 100000 was debited from the balance amount of Mr X from the Bank

Solution:
In the given case, there are two parts.
Firstly there in advance payment of ` 20000 to the Hotel – J W Marriott by Mr X.
Secondly, there is a balance payment of ` 100000.
Thus, for determining the time of supply, we also need to understand and clarify the concepts in two aspects
a. For Advance - Time of Supply shall be Date of Payment or Date of Invoice whichever is earlier. Therefore,
in this case, advance was given on 08th September which is the date of payment or 18th December which is
the date of invoice, whichever is earlier. Therefore, here the Time of Supply will be 8th September
b. For Balance Amount - Time of Supply shall be Date of Payment or Date of provision of supply, if invoice is
not raised within 30 days.
Here, the Invoice was raised after 30 days i.e. 18th December which is more than 30 days from the date of
utilisation of service which is 02nd November.
Therefore, in this case, Time of Supply will be 02nd November

Solved Case 1

SP Singla Constructions Pvt. Ltd. (GST AAR Gujarat - 2022):

Question on which Advance Ruling sought: SP Singla Constructions Pvt. Ltd. desires to obtain Advance Ruling
on the question as to what is the time of supply for the purpose of discharge of GST under the CGST Act, 2017 in
respect of Mobilization Advance (hereinafter referred to as ‘said advance’) received by it for construction services
provided by it? SP Singla Constructions Pvt. Ltd. received advance from its recipient of service for procurement
of goods.
Advance Ruling: SP Singla Constructions Pvt. Ltd. does not contest the taxability on said Advance, but is before
us for its deferment from date of its receipt to date of issue of invoice. We pass the Ruling based on Section 13(2)
CGST Act read with its explanation (i). Time of Supply, on said Advances received by SPSC for Supply of its
Service, is the date of receipt of said advance.
Advance is for procurement of Goods. SP Singla Constructions is Service provider, supplying Works Contract
Service. We refer to Schedule II (6)(a) CGST Act, wherein works contract shall be treated as supply of service.
The Contract submitted before us is also for the same. The Payment terms and conditions are part and parcel
of the contract. We find it neither tenable to colour a Service Contract as Goods supply contract nor rational to
misrepresent a Service contract as Goods supply contract to hoodwink Section 13(2) CGST Act and defer payment
of Tax.

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Exercise
A. Theoretical Questions
~ Multiple Choice Questions

1. Find the time of supply from the following where date of supply of service is 7th September 20XX
(a) Date of invoice 30th Oct 20XX
(b) Date of payment received by way of cheque and the entry for receipt of payment is recorded in
books of accounts 10th Oct 20XX
(c) Amount credited to bank account of supplier 12th Oct 20XX
(d) 7th September 20XX

2. What is time of supply of service with respect to receipt of amount in excess of the invoice amount.
(a) Date of issue of invoice by the supplier, if the invoice is issued within the period prescribed u/s 31
or the date of receipt of payment, whichever is earlier; or
(b) Date of provision of service, if the invoice is not issued within the period prescribed u/s 31 or the
date of receipt of payment, whichever is earlier; or
(c) Date on which the recipient shows the receipt of services in his books of account, in a case where
the provisions of clause (a) or clause (b) do not apply:
(d) All (a), (b) & (c)

3. What is time of supply of goods, in case of forward charge?

(a) Date of issue of invoice
(b) Due date of issue of invoice
(c) Date of receipt of consideration by the supplier
(d) Earlier of (a) & (b)

4. Mr. A, who has opted for composition levy, supplies goods worth ` 24,300 to Mr. B and issues an invoice
dated 25.09.20XX for ` 24,300. and Mr. B pays ` 25,000 on 1.10.20XX against such supply of goods.
The excess ` 700 (being less than ` 1,000) is adjusted in the next invoice for supply of goods issued on
5.01.20XX. Identify the time of supply and value of supply:
(a) For `25,000 – 1.10.20XX
(b) For ` 24,300 – 25.09.20XX and for ` 700 – 1.10.20XX
(c) For ` 24,300 – 25.09.20XX and for ` 700 – 5.10.20XX.
(d) (b) or (c) at the option of supplier, who has opted for composition levy

5. Value of services rendered is ` 1,00,000/ on 1st October 2024. Date of issue of invoice is 5th October
2024. Advance Received is ` 25,000/- on 20th September 2024. Balance amount received on 7th October
2024. What is the time of supply for ` 1,00,000/-
(a) 5th October 2024 for ` 1,00,000/-

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(b) 20th September 2024 for ` 1,00,000/-

(c) 20th September 2024- ` 25,000/- and 5th October 2024 for ` 75,000/-
(d) 20th September 2024- ` 25,000/- and 7th October 2024 for ` 75,000/-

6. There was increase in tax rate from 12% to 18% w.e.f.1.09.2024. Which of the following rate is
applicable when services are provided after change in rate of tax in September 2024, but invoice issued
and payment received, both in August 2024:
(a) 12% as it is lower of the two
(b) 18% as it is higher of the two
(c) 12% as invoice and payment were received prior to rate change
(d) 18% as the supply was completed after rate change

7. ABC Ltd has purchased for its customer 50 vouchers date 20th Aug 20XX worth ` 500 each from Ram
Pvt. Ltd. a footwear manufacturing company. The vouchers were issued by Ram Pvt. Ltd on 20th Sep
20XX. The vouchers can be encashed at retail outlets of Ram Pvt. Ltd. The employees of ABC Ltd.
enchased the same on 1st Oct 20XX. Determine the time of supply of vouchers.
(a) 20th Aug 20XX
(b) 20th Sep 20XX
(c) 1st Oct 20XX
(d) None of the above

8. What is the maximum time limit for issue of tax invoice in case of insurance service providers and
banks?
(a) 30 days
(b) 45 days
(c) At the time when supply ceases
(d) At the time when supply started

9. Determine the amount of GST in case of supply of service of ` 10,00,000 on 4th Sep 20XX and invoice
has also been issued on the same date. The date of payment is 30th Aug 20XX. The CGST rate has been
increased from 5% to 12% w.e.f. 1st Sep 20XX.
(a) `50,000
(b) `1,00,000
(c) `70,000
(d) `1,20,000

10. Which notification removed the requirement of payment of tax on advance receipt in case of supply of
goods?
(a) Notification No. 10/2017 Central Tax, dated 15th November 2017

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(b) Notification No. 66/2017 Central Tax Dated 15th November 2017
(c) Notification No. 77/2017 Central Tax Dated 15th November 2017
(d) Notification No. 66/2017 Central Tax Dated 15th November 2018

11. Mr. A entered into a contract with Mr. B & agreed to make the payment by 30th Sep 20XX. If the
payment is not made in time, then he shall pay late fees @`200 per day. No payment of late fees has been
made so far. What shall be the time of supply in respect of the late fees due on Mr. A.
(a) September 20XX
(b) October 20XX
(c) Time of supply has not arisen
(d) None of the above

12. There was decrease in tax rate from 28% to 18% w.e.f. 1.09.2024. Which of the following rate is
applicable if the supplier has not opted for composition levy and supplies goods to Customer? Further,
Goods were removed from its factory on 31.08.2024; delivered at buyer place on 2.02.2024; invoice is
issued on 31.08.2024 and payment is received on 4.09.2024.
(a) 18% as it is lower of the two
(b) 28% as date of invoice and dispatch of goods from factory, has happened before change of rate
(c) 18% as both, payment and completion of supply, has happened after change of rate
(d) none of the above

13. M/s Wanderlust Travels (P) Ltd. purchased a bus chassis from M/s Krishi Motors Ltd. for a consideration
of ` 90.00 lakh on 1st Jan 2024. M/s Wanderlust Travels (P) Ltd. sent the bus chassis for body building to
M/s Bhagwant Fabricators and paid in advance the total consideration of ` 25.00 lakh on 15th Oct 2024.
M/s Bhagwant Fabricators, after completing the bus body, informed M/s Wanderlust Travels (P) Ltd for
carrying out the inspection of the work done on 5th Nov 2024. M/s Wanderlust Travels (P) Ltd. visited
the work shop of M/s Bhagwant Fabtricators on 8th Nov 2024 and confirmed that the bus body was in
accordance with the terms of the contract.
The last date for issuing the invoice by M/s Bhagwant Fabricators is
(a) 15th Oct 2024
(b) 8th Nov 2024
(c) 8th Dec 2024
(d) 5th Dec 2024

Answers:

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13.

d d d d c c b b d b c b c*

* Note: Treated as supply of goods

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