NNVNXVI -

Para 8.3 TIME OF SUPPLY 8.2

The following cases are to be covered in this regard:

TIME OF SUPPLY (TOS)

TOS of Services
TOS of Goods

1. Under Forward Charge 1. Under Forward Charge

2. Under Reverse Charge 2. Under Reverse Charge

3. For Exchangeable Voucher of Goods 3. For Exchangeable Voucher of Services

4. Residual Cases. 4. Residual Cases.

SECTION 12 SECTION 13

8.3 KEY CONCEPTS FOR UNDERSTANDING TIME OF SUPPLY (TOs)

The time of supply under GST has been linked with events like issue of invoice, receipt of payment,
due date ofissue of invoice, etc. The basic philosophy of timeof supply, as appears from the provisions,
reflects that the law desires to collect the tax to the earliest possible time. Before analyzing the related
statutory provisions given in sections 12 and 13, there are certain terms and concepts which must
be understood first. These points have been discussed here so as to maintain the significance and
depth of the specific provision.

8.3.1 Forward and Reverse Charge

Usually the supplier isliableto pay tax, popularly called as Forward Charge. The Governmentis
empowered under section 93) of the CGST Act, to specify the categories of supply of goods and/or
services, the tax on which shall be paid by the recipient of such goods/services. When the liability
to pay tax lies with the recipient, instead of supplier, it is termed as Reverse Charge. (It has been
discussed in detail in Chapter 13)

8.3.2 Time Limit for issue of Invoice for supply of Goods

The provisions of time of supply lay down much emphasis on the fact whether
or not the invoice
has been issued within the prescribed time limit. The related
statutory provisions of section 31 have
been discussed in detail in Chapter 14. But, these have been
given in brief in this Para, so that the
TOS provisions may be understood properly. The following are the rules:
As per section 31(1), the invoice needs to be issued either before or at the time of removal (where
supply involves movement of goods) of goods/delivery of goods/making goods available torecipient.
In case of continuous
supply of goods, the invoice should be issued before or at the time of
issuance of periodical statement/receipt of periodical payment [Section 31(4)1
In case of goods sent or taken on approval for sale or return, invoice should be issued before
or at the time of supply or 6 months from the date of removal, whichever is earlier [Section
31(7)
(You may refer Chapter 14 for detailed provisions in this regard.)

8.3.3 Time Limit for issue of Invoice for supply of Services

The miscellaneous provisions relating to time limit for issuance of invoice for supply of services
are as follows:
 8.3 KEY CONCEPTS FOR
UNDERSTANDING TIME OF SUPPLY Para 8.3
(1) As per section 31(2) read with rule
47 of CGST Rules, the tax
before the provision of service or invoice needs to be issued either
within 30 days from the date of
of 30 days is 45 days in case of
insurance companies/banking supply of service. This limit
including NBFCs. companies/linancial institutions
(2) In case of cessation of
supply of services before completion of supply, the invoice (to the ex-
tent of the supply made before
such cessation) should
be issued at the time when the supply
ceases.

(3) In case of continuous

supplyof services, the invoice should be issued
either
() On/before the due date of
payment or
(i) Before/at the time when the supplier of service receives the
payment
(ii) On/before the date of completion of the milestone event when the
to completion of an event. payment is linked

(4) The invoice may be issued before or at the time of recording of supply in the books of account
or betore the
expiry of the quarter during which the supply was made, in case of tollowing:
Insurance companies
Banking companies
Financial institutions including NBFCs
Telecom companies
Notified supplier of services making taxable supplies between distinct persons (as spec-
ified in section 25).
(The Chapter 14 contains the detailed provisions in this regard.)

8.3.4 Date of Receipt of Paymne

In case of forward charge, where the supplier is liable to pay tax, the date at which payment has
been received by the supplier is very important. As per the Explanation 2 to section 12(2), "the date
on which the supplier receives the payment" shall be the date on which the payment is entered in
his books of account or the date on which the payment is credited to his bank account, whichever
is earlier.
In other words, the date of receipt of payment refers to the date on which the payment is recorded
in the books of account of the entity (supplier of goods) that receives the payment, or the date, on
which the payment is credited to the entity's bank account, whichever is earlier. Therefore, the date
of receipt of payment is earlier of the following:
(i) The date on which the payment is entered in the books of account of the supplier

(ii) That date on which the payment is credited in his bank account.

Example 8.1:
Mr. X, a registered supplier received an advance of R 5,00,000 along with the purchase order on 15-1-2018.
This advance payment was entered in the books of account on 16-1-2018 and credited in his bank account
on 18-1-2018. The time of receipt of payment shall be earliest of entry inthe books(l6-1-2018)and credit in
bank account (18-1-2018). Therefore,thedate of receipt of paymentwillbe takenas 16-1-2018.
8.3.5 Date of Payment
In case of Reverse Charge, the recipient is liable to pay tax. The time of such supply gives importance
to the date at which payment has been made by the recipient. In this regard, the date ot pavmen
refers to the date on which the payment is recorded in the books of account of the enuty n
 Para 8.4 TIME OF SUPPLY
8.4

is debited from the

the service the date on which the payment
(recipient of service), or
TCceves of payment is earlier
of the following:
Cuty s bank account, whichever is earlier. Therefore, the date
of the recipient
7) The date of payment as entered in the books of account
(ii) That date on which the payment is debited in his bank account

Example 8.2:
ot these goods is liable to
from Mr. S. The tax in respect
D a registered person, has purchased goods o n 21-1-2018 and
the s a m e w a s entered by the
D p a i d on Reverse Charge Basis. Mr. B made payment
is debited in the bank account
22-1-2018. On 24-1-2018, the payment
accountant in the books of Mr. B on
in the books (22-12-2017)
and debit in bank account
of Mr. B. The time of payment shall be earliest of entry

(24-1-2018). Therefore, the date payment will be taken as 22-1-2018.

of

8.3.6 Vouchers
the words "In case of supply of vouchers by
The statutoryprovision of sections 12(4) and 13(4) u s e s
supplier..."The "Voucher" here should not be understood in the common parlance
as
the accounting
voucher or related term used in auditing. Rather, under GST laws, the vouchers are instruments
that can be exchanged as payment for goods or services of the designated value. As per section
a s consideration or
2(118), Voucher means an instrument where there is an obligation to accept it
part consideration for a supply of goods or services or both and where the goods or services or both
to be supplicd or the identities of their potential suppliers are either indicated on the instrument
itsclfor in rclated documentation, including the terms and conditions of use of such instrument.t
is important to note that for TOS, the vouchers may be divided into two catcgories:
(a) Where supply is identifiable against the Voucher:
This category of vouchers includes those vouchers wherein the supply against the vouchers
is known at the time of issue of voucher.

Example 8.3:
Haldiram hasopened a new outlet at Laxmi Nagar, Delhi. It has issued a voucher for deluxe thali worth
450 to first 20 customers. Now, in this case, we know that the
supplier (i.e. Haldiram) will provide the
specific supply of deluxe thali against the voucher. Hence, the supply of this voucher is identifiable. |
(b) Where supply is NOT identifiable against the Voucher
This category covers all those vouchers against which the
known
goods o r services to be provided are
not at the time of issue of voucher. The reason
available,
being the number of goods/services
are any of which may be used to redeem the voucher.

Example 8.4:
The Paschim Vihar branch of
be redeemed against
Easy-day, a departmental store, has issued vouchers worth 7 2,000 which
can
purchase of any goods available in the store. The
various types of goods with varying rates of GST.
Here, we don't know the
departmental store has
customer will buy to redeem the voucher. Theretore, for this particular goods which the
voucher, the supply
is not identifiable.
(The rules regarding TOS in case of Vouchers have been
of the chapter.) discussed under Paras 8.12 and 8.15

8.4 TIME OF SUPPLY OF GOODS [SECTION 12]

The liability to pay tax on goods shall arise at the time ot supply
of section 12 of CGST Act, 2017. (TOS) as determined in accordance
with the provisions This section covers the
of suppiv in the tollowing situations: determination of time
(a) Supply of goods where supplier is liable to pay tax [Section 12(2)1
 8.5 TIME OF SUPPLY OF GOODSS Para 8.4

(b) Receipt of goods that are taxable under Reverse Charge [Section 12(3)]
(c) Supply of Vouchers [Section 12(4)|
(d) Residual Cases [Section 12(5)
(e) Addition to the value of Supply [Section 12(6)]
8.4.1 TOS for Supply of Goods (Forward Charge)[Section 12(2)1
As per section 12(2) of CGST Act, 2017, where the supplier is liable to pay tax under forward charge,
the time of supply of goods shall be the earlier of the
following dates, namely:
(a) The date of issue of invoice by the supplier or the last date on which he is required, under
section 31, to issue the invoice with
respect to the supply;
OR
(b) The date on which the supplier receives the payment with respect to the supply:
(The delermination of last date for issue of invoice and determination of date of payment have
been discussed in Para 8.3.2 and Para 8.3.4 of the same chapter)
Notification No. 66/2017 Central Tax, dated 15th November, 2017
Vide this notification, the Central Government has notified that the registered person who did not opt for
the composition levy under section 10 of the said 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 () of sub-section (2) of section
12 of the said Act including in the situations attracting the provisions of section 14 of the CGST Act, and shall
accordingly furnish the details and returns as mentioned in Chapter IX of the said Act and the rules made
thereunder and the period prescribed for the payment of tax by such class of registered persons shall be
such as specified in the CGST Act.
ANALYSIS OF SECTION 12(2) READ WITH ABOVE NOTIFICATION
On account of above notification, all taxpayers (Except Composition Suppliers) are exempted from
paying GST at the time of receipt of advance in relation to supply of goods under forward charge.
Thus, the time of supply shall be the time when the invoice for the supply of such goods is issued or
ought to have been issued. Therefore, w.e.f. the date of receipt of advance payment will be irrelevant
and will not affect the determination of time of supply.

Example8.5:
Mr. X, the supplier, received order on 12th December, 2017 for supply of machinery to Mr. Y. Mr. Y paid
total due amount as advance along with the order. The machinery was delivered on 18th January, 2018.
What will be TOS if the invoice has been issued on:
() 17th January, 2018
(i) 25th January, 2018

Solution:
Theperiod falls after 15-11-2017 ie. after Notification No. 66/2017. It means the date of advance will not be
considered. The TOS, in this case, will be determined as under
Case I Case
17th January, 2018 25th January, 2018
(a) Date of issue of actual invoice 17-1-2018 25-1-2018
(b) Last date for issue of Invoice as per section 31(1) 18-1-2018 18-1-2018

(c) Date of receipt of amount Not Relevant Not Relevant

Time of Supply 17-1-2018 18-1-2018

Para 8.4 TIME OF SUPPLY 8.6

involves movement of goods

EXample8.6 [Forward Charge where supply movement of goods.
where supply involves
Consider the following independent cases of supply
Date of receipt of
Date of issue of Date when goods
Case Date of Removal of the
payment by the
invoice by the supplier made available to supplier
goods recipient
28-1-2021
20-1-2021
18-1-2021
1 15-1-2021 2-2-2021
19-1-2021
16-1-2021
2 17-1-2021 2-1-2021
28-1-2021
25-1-2021
3 25-1-2021 CGST Act read with
section 12(2) of
accordance with the provisions of
Determine the time of supply in
15-11-2017.
Notification No. 66/2017-CT dated
manner:
Solution: determined in the folowing
shall be
each of the above cases

The Time of Supply of goods in Case-3

Case-1 Case-2
16-1-2021 25-1-2021
18-1-2021

Actual date of issue of

invoice by supplier 17-1-2021 25-1-2021
(a) |
15-1-2021
of invoice as per section 31(1) Not Relevant
Last date for issue Not Relevant
(b) Not Relevant
25-1-2021
Date of receipt of Amount 16-1-2021
(c) 15-1-2021
Time of supply (Earliest)
goods]
where supply DOES NOTinvolve movement ofwith section 12(2)
Example 8.7 [Forward Charge cases in accordance
independent
in each of the following
Determine the Time of Supply goods. of
| c a s e where supply
does not involve
movement

receipt of payment by
of CGST Act in
made Date of
Date when goods the supplier
Date of issue of invoice
Case available to the recipient
by the supplier 1-1-2021
4-1-2021
2-1-2021 19-1-2021
5-1-2021
3-1-2021
2-1-2021
10-1-20211
4-1-2021
3

Solution: Case-3
Case-1 Case-2
3-1-2021
4-1-2021
2-1-2021
supplier
date of issue of invoice by 5-1-2021
2-1-2021
(a) Actual 4-1-2021
date for issue of invoice as
per section 31(1) Relevant
(b) |Last Not Relevant Not Relevant Not
2-1-2021
of Amount 3-1-2021
(c) Date of receipt 2-1-2021
Time of supply (Earliest) no GST is payable on advances
66/2017-CT dated 15-11-2017,
Notihcation No.
that after issue
of
(i.e. Forward Charge).
It is clear
of goods under normal supply of goods
received for supply Approval basis:
in case of Sale on
be
Determination
of Time of Supply for sale o r return,
invoice should
approvaltaken on It
sent o r whichever is earlier.
31(7), in c a s e of goods from the date of removal,
As per
section or 6
months
o r after
the expiry
or at the time of supply acceptance of by the recipient
issued before on the date
of
must be 1Ssued happens earlier.
the invoice removal,
whichever
means
date of
months from the
of ó
8.7 TIME OF SUPPLY OF GOODS Para 8.4

Example 8.8 [TOS in case of supply of goods on approval basis]1

Determine the time of supply in the following cases if goods were supplied on approval basis:

Case Date of Removal of goods Date when goods are accepted Date of receipt of payment by
by the recipient the supplier
11-2-2021 14-2-2021 25-2-2021

2 4-1-2021 11-8-2021 12-8-2021

Solution:
Case-1 Case-2

(a) Date of acceptance of goods by the recipient 14-2-2021 11-8-2021

(b)6 months from the date of removal of goods for approval 10-8-2021 3-7-2021

Time of supply (Earliest) 14-2-2021 3-7-2021

Time of Supply in case of Excess Payment [option in case of advance up to 1,000]

As per proviso to section 12(2)/b), where the supplier of taxable goods receives an amount up to
1,000 in excess of the amount indicated in the tax invoice, the time of supply to the extent of such
excess shall, at the option of the said supplier, be the date of issue of invoice in respect of such
excess amount.

Example8.9: (Time of Supply of Excess Amount]

On 3-8-2017, Mohan has issued an invoice of 7 12,230 for supply of goods made on the same date. He
received 12,500 in his bank account on 4-8-2017 through Net banking. The same was entered in the books
on 5-8-2017. Now in this case, the point of supply for I 30 shall be 3-8-2017, when the invoice was raised
which is earier than the payment received. Mohan has received R 270 in excess which cannot be taken as
payment for invoice issued on 3-8-2017.Hence, Mohan will adjust the excess amount against the next supply.
Therefore, the TOS for 7 270 will be the date of issue of next invoice, but at the option of supplier. It means
if he chooses, he may includethe same alongwith invoice of 12,230.
Relevance of option Regarding Excess Payment
Since, the Government has given relaxation in respect of date of receipt of advance to all the suppliers,
(except Composition Levy Dealer), the GST is not payable on the basis of advance payment. The
practical application of this proviso can be analysed in the following manner.
(1) If a person is covered under Composition Scheme:
A composition dealer has to pay, in lieu of tax payable by him, an amount calculated at the
prescribed rate applied on his "turnover in the state/Union territory" for a quarter. There-
fore, effectively the composition dealer is not required to pay any tax on advance received as
the same does not form part of taxable supplies and, in turn, also does not form part of the
"turnover in the state/Union territory" at the end of the quarter (tax period). The provisions
relating to composition dealer have been discussed in detail in Chapter No. 5
(2) Other Case (i.e. not covered by Composition Scheme):
As already discussed in Para 8.4.1, by virtue of Notification No. 66/2017 - Central Tax, dated
5th November, 2017, w.ef. 15.11.2017, the GST on supply of goods (under Forward Charge)
is payable only on the basis of issuance of invoice. Thus, there is no relevance of date of
receipt of advance. Hence, this provision is practically irrelevant for supply of goods under
this category.
 Para 8.4 TIME OF SUPPLY 8.8
8.4.2 TOS for Receipt of goods that is taxable under Reverse Charge [Section 12(3)]
n case ol supplies in respect of which tax is paid or liable to be paid on reverse charge basis, the
time of supply shall be the earliest of the dates, namely:
following
(a) The date of the receipt of the goods, or
(b) 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
(C) The date immediately following 30 days from the date of issue of invoice or any other doc.
ument, by whatever name called, in lieu thereof by the supplier.
In case of (c) above, it means that the 31st day from the date of issuance of invoice by the supplier
shall be taken. For example: If the date of issue of invoice by supplier is 20-11-2017, then date for
third condition will be 20th November +30 days +following dayi.e. 21-12-2017. Therefore effectively,
the 31st day is to be taken.
If above does not work
As per proviso to section 12(3), where it is not possible to determine the time of supply as per above
mentioned manner, the time of supply shall be the date of entry in the books of account of the
recipient of supply.

Example8.10:
Ritu Traders supplied to Mr. B certain
goods, which are liable to be paid on reverse
charge basis.
The following details are available:

Transaction/Event Date
(1) Date of receipt of goods by Mr. B
12-1-2018
||(2) | Date on which the payment is made by Mr. B
18-2-2018
(3) Dale on which above payment is entered in books by Mr. B
20-2-2018
4) Date on which above payment is debited in bank account of Mr. B
Date of issuc of invoice
21-2-2018
(5) by supplier (Ritu Traders) 10-1-2018
Now there are three relevant dates, the earliest of which shall be
the point of supply.
Event
Date of reccipt of goods by Mr. B Date
The date 12-1-2018
| of payment as entered in the books of the
recipicnt 20-2-2018
The date on which the payment is debited in his bank
A/c of recipient
21-2-2018
|The date immediately following 30 days from the date of issue of invoice
10-2-2018
(i.e. the 31st day from the date of issuance of invoice by
supplier)
Point of Supply (Earliest)
12-1-2018

Example 8.11
In above example, il goods are received by Mr. B on
22-2-2018, then the point of supply will be
determined as follows:
 TIME OF SUPPLY OF GOODS Para 8.4
8.9

Again let us find out the relevant dates, the earliest of which shall be the point of supply.

Event Date
Date of receipt of goods by Mr. B 22-2-2018

The date of payment as enteredin the books of the recipient 20-2-2018

Thedate on whichthe paymentis debited in his bank A/c of recipient 21-2-2018

The date immediately following 30 days from the date of issue of invoice 10-2-2018

(iethe 31st dayfrom the date ofissuanceofinvoice by supplier) 10-2-2018

Point of Supply (Earliest)

Example 8.12 [TOS in case of supply of goods under Reverse Charge Basis]
Determine the time of supply in each of the following independent, in accordance with section 12(3) of CGST
Act, 2017. The recipient of goods is liable to pay GST under RCM in all the cases:

Case Date of issue of in- Date of receipt of Date of payment in Date when payment
voice by the supplier goods by the recipient the books of recipient is debited in Bank Ac
count of Recipient
16-1-2021 17-1-202 1
5-1-2021 11-1-2021
6-1-2021 10-1-2021 9-1-2021 12-1-2021
18-1-2021 16-1-2021 15-1-2021
7-1-2021
11-2-2021 13-2-2021 20-2-2021
8-1-2021
Solution:
Particulars Case-1 Case-2 Case-3 Case-4

(a) | Date of receipt of goods 11-1-2021 10-1-2021 18-1-2021 11-2-2021

the books of recipient 16-1-2021 9-1-2021 16-1-2021 13-2-2021
(b | Date of payment entered in
in Bank A/c of| 17-1-2021 12-1-2021 15-1-2021 20-2-2021
(c)|Date on which payment debited
recipient 7-2-2021 8-2-2021
Date immediately following 30 days from the
date 5-2-2021 6-2-2021
(d) | the date
of issue of invoice. (ie. the 31st day from
of issuance of invoice by supplier)
Time of Supply as per section 12(3) 11-1-2021 9-1-2021 15-1-2021 8-2-2021

8.4.3 TOS for Supply of Vouchers [Section 12(4)]

The meaning of voucher has already been given in detail in Para 8.3.6. As regards the time of supply
(TOS) in case of supply of vouchers by a supplier, following are the rules

Clause Case Timeof Supply

If the supply is identifiable at the point at which voucher is issued | The date of issuance of voucher
()
(b If the supply is not identifiable at the point at which voucher The date of redemption of voucher
is issued

Example 8.13:
On account of increasing competition, the Dominos has launched a scheme under which with each purchase
be redeemable till 24th
of a large pizza, during the Diwali Season, one can buy a voucher for 7 50 which will redeemed is knOwn on
NOvember for a small pizza. Now, as the supply against which the voucher will be
thedate of the sale, the time of supply is the date of issue of the voucher.
Para 8.5 TIME OF sUPPLY
8.10
8.4.4 TOS for Residual Cases (Section 12(5)]
Where it is not possible to determine the time of supply as per Section 12(2) or 12(3) or 12(4)1t
time of supply shall be as under:

Clause Case Time of Supply

( Where a periodical return has to be filed The date on which such return is to be hled

(b) In any other case The date on which the tax (L.c. GST) is Dain
aid
tis important to note that this residuary provision is applicable only when the other provisionsare
found to be inapplicable and not mercly when there is some difficulty in determining the lacts that
are sought for by the relevant
provision.
8.4.5 TOS in relation to value of Supply by way of Interest, etc. [Section 12(6)]
Usually the contracts of supplies contain the provision of payment of interest or late fee or penalty
in the event of payment of consideration, by the recipient, beyond the agreed time period. As per
section 15(2xd) of the CGST Act, this additional payment is includible in the value of supply (Please
reter 9.3.1 for detailed discussion). It means the liability to pay GST arises on such addition in value
also. Section 12(6) prescribes that the time of supply to the extent it relates to an addition in the
value of supply by way of interest, late fee or penalty for delayed payment of any consideration
shall be the date on which the supplier receives such addition in value.

In other words, the special charges imposed for delay in payment of consideration will enjov the
facility of time of supply being date of receipt of the charges imposed, that is, cash-basis of payment
of GST.

Example8.14:
Smart limited supplied goods to Dinanath for 7 1,50,000 on 15-10-2017.
The payment for the same can be
made up to 28-10-2017. If the buyer fails to make the then interest
payment, shall be charged @ 7 100 per
day to be calculated from 16-10-2017. Dinanath paid the due amount 7 1,50,000 on 18-11-2017. As regards
interest, the supplier agreed to waive a portion of interest against payment of R 1,800
makes the payment of R 1,800 on the same date i.e. 18-11-2017. immediately. Dinanath

In this example, the time of

supply of goods shall be 15-10-2017, when the invoice was raised which is earlier
then the date of payment
(18-11-2017). As per section 12(6), the time of supply in relation to value of
by way of interest shall be 18-11-2017 i.e. the date of supply
receipt of the interest amounting to 1,800.
8.5 TIME OF SUPPLY OF SERVICES ISECTION 13]
The liability to pay tax on services shall arise at the
time of supply (TOS) as
with the provisions of section 13 of CGST Act, 2017. determined in accordance
This section covers the
of supply in the following situations. determination of time
(a) Supply of services where supplier is liable to pay tax
[Section 13(2)1
(b) Receipt of services that are taxable under Reverse
Charge [Section 13(3)1
(c) Supply of Vouchers [Section 13(4)]
(d) Residual Cases [Section 13(5)]
(e)Addition to the value of Supply [Section 13(6)]
8.11 TIME OF SUPPLY (OF
SERVICES Para 8.5

R5.1 TOS for Supply of Services (Forward Charge)[Section 13(2)1

As per section 13(2) ol CGST Act, 2017, the time of supply ol services shall be the earliest ol the
following dates, namely:

Clause Case
Time of Supply
(a) | If the invoice is issued within the period The date of issue of invoice by the supplier
prescribed under Section 31
OR
|Please refer Para 8.3.3 for the
period of issue of invoice under prescribed The date of receipl ol
paynen
section 31||
whichever is EARLIER
(b) If the invoice is not issued within the
period The date of provision ol service
prescribed under Section 31
OR
The date of receipt of paymen
whichever is EARLIER
() IFAbovetwoclauses (a) and (b)donot apply The date on which the recipient shows the receipt of
services in his books of account

Example 8.15:
The Rama Consultancy services' is engaged in
providing laxable services. It has provided a service to M/s
Ruhani enterprises on 19-1-2018, the invoice in respect of which was issucd on 20-1-2018. The payment in
this respect was received on 22-1-2018 which was entered in the books on the same date. The same was
credited in the bank account of "The Rama Consultancy services' after two days on 24-1-2018. Now, in this
example, the time of supply shall be the earlier of the following dates:

1. Date of issue of Invoice (Since it has been issued within 30 Days) 20-1-2018
2. Date of entry for receipt of payment 22-1-2018
3. Date of credit of payment in bank account 24-1-2018

Being, the earliest of the three dates, the time of supply shall be 20-1-2018.
If in the same example, the invoice was raised on 25-2-2018, then the position will be different. In
this case, the date of completion of service will be taken into account. The reason being the invoice
has been issued after preseribed period of 30 days. The time of supply shall be the carliest of the
following dates:
1. Date of completion of service 19-1-2018
(Since the invoice has been issued afterprescribed limit of 30 days)
2. Date of entry for receipt of payment 22-1-2018
3. Date of credit of payment in bank account 24-1-2018
Time of supply (Earliest of all the dates) 19-1-2018
Para 8.5 TIME OF SUPPLY
8.12

1. Date of issue of Invoice (Since it has beenissuedwithin 45 Days) 18-12-2017

2. Date of receipt of payment 16-11-2017
Time of supply (Earliest of the two dates) 16-11-2017
n the same example, if the invoice has bcen issued after 45 days, then date of service shall be taken. In tha
Case, the me of supply would be 14-11-2017 as payment was received atter this date.

When Advance is received or invoice is issued for part payment

to have been made
AS per Clause (i) to Explanation to Section 13(2), the supply shall be deemed to

the extent it is covered by the invoice or, as the case may be, the payment.
Therefore, where a part of the consideration is paid in advance or invoice is issued tor part pavme
the time of supply will not cover the whole supply. The above explanation clearly provides that,
the supply shall be deemed to have been made to the extent it is covered by the invoice or the par
advance payment.

Example 8.17:
On 12th January 2018, B.R. Ambedkar College (of Delhi University) has booked 'Shah Auditorium' for their
Annual Day Function. The function is to be held on the foundation day of the college i.e. on 8th Februar
The college has paid booking amount of 7 20,000 on the date of booking. The function was successfully held.
The invcice was raised by the manager of Auditorium on 10th February for F 50,000, indicating balance of
30,000 payable. This balance amount was paid by college on 16th February, 2018.
|Let us determine the time of supply. Now, the time of supply of service to the extent of 7 20,000 is 12th
January, 2018as the date of payment is earlier than the date of service. But, the time of supply of service to
the extent of the balance 30,000 is 10th February which comes before the date of payment (i.e. 16-2-2018)
| It may be noted that the date of provision of service has not been taken since the invoice was issued within
the preseribed time limit.
Time of Supply of Services in case of Excess Payment
As per proviso to section 13(2), where the
supplier of taxable service receives an amount
up to one
thousand rupees in excess of the amount indicated in the tax invoice, the time of
extent of such excess amount shall, at the
supply to the
option of the said supplier, be the date of issue of invoice
relating to such excess amount.

Example 8.18: [Excess amount received by Telephone Companyl

MTNL, a telephone company, receives R 2,000
be adjusted against the next invoice. The
against an invoice of R 1,560. The excess amount of 7 440 can
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 R
440 received in excess
against the earlier invoice.
8.5.2 TOS for Receipt of services that is taxable under Reverse Charge [Section 13(3)
In case of supplies in respect of which tax is
time of supply shall be the earliest of the
paid or liable
be paid on reverse
to
charge basis, the
following dates, namely:
(a) The date of payment as entered in the books of account of the
the payment is debited in his bank recipient or the date on which
account, whichever is earlier, or
(b) The date immediately following 60 days trom the date of issue
of invoice or any other doc
ument, by whatever name called, in lieu thereof by the
supplier.
In case of (b) above, it means that the 61st
day from the date of issuance of invoice by the
of service shall be taken. supplier
8.13 TIME OF SUPPLY
OF SERVIES Para 8.5

Example 8.19:
the date ol issuc ot ivoce by supplieT is 20-11-2017, then date for third condition will be 20th November
oddavs tollowing day i.e. 20-1-2018. Therelore ellectivelv, the 6lst day is to be laken.
If above does not work

As per tust proviso to seetion 13(3), where it is not

possible to determine the time ol supply as or
above mentioncd nanner, the time of supply shall be the date of entry in the books of accountper
the recipient of supply.

Associated Enterprises
As per second proVISO to section 13(3), in case of supply by 'associated enterprises, where the
supplier ot 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.

Example 8.20: [TOS: Supply of Goods Under RCM]

Bharat, a registered person, has received the supply of services from non-taxable territory. Accordingly, the
tN is liable to be paid by the recipient on reverse charge basis. Bharat provides the following intormation
in respect of such service received by him.

Transaction/Event Date
(1) Date of paynnent as entered in the books by service receiver (Bharat) 2-12-2017
(2) Date on which above payment is debitcd in bank account of Bharat 5-12-2017
(3) Date of issue ot invoice by supplier of service 24-11-2017

irst of all, there is a necd to determine the date immediately following the 60 days from the date of issue
of invoice. It means the 6lst day from the date of issuance of invoice by the supplier of service shall be
taken ic. 24-11-2017 + ol days. It comes on 24th January, 2018. The point ofsupply shall be the earliest of
the tollowing diates.

Event Date
Date of pavment as cntered in the books by service receiver (Bharat) 2-12-2017
Date on which above payment is debited in bank account of Bharat 5-12-2017
The date immediately tollowing the 60 days from the date of issue of invoice. 24-1-2018
Point of Supply (Earliest) 2-12-2017

Example 8.21 [TOS in case of supply by Associated Enterprise which is located outside India]
Varad Lid, Delhi, holds 51 of shares of Anderson PLC, a UK based company. Anderson PLC provides
business auxiliary services to Varad Lid. Consider the following information in respect of said supply.

(a) Date on which services are provided by Anderson PLC 5-1-2021

(b) Date on which invoice is issued by Anderson PLC 15-1-2021
(c)Dateof debitinthe books of account of Varad Ltd. 28-1-2021
(d) Date on which pavment is made by Varad Ltd. 4-2-2021
On the basis of above details, determine the time of supply of service provided by Anderson PLC:

Solution:
Relationship Varad Lid. holds 51% shares of Anderson PLC.
between the two
Varad Lid. and Anderson PLC are 'associated enterprises' as per section 92A or
companies the Income-tax Act, 1961.
 Para 8.5 TIME OF SUPPLY
8.14
Time of Supply As per second proviso to section 13(3)
In case of supply by associated enterprises, where the supplier of service is located
oulside India, the time of supply is the earlier of the following two dates:

(a) Date of entry in the books of account of the recipient of supply.

(b) Date of payment by Varad Ltd. the recipient of supply.
In the given case Date of entry in the books 28th January, 2021
Date of payment 4th February, 2021
28th January, 2021
Time of Supply
8.5.3 TOS for Supply of Vouchers [Section 13(4)]
The meaning of voucher has already been given in detail in Para 8.3.6. As regards the time of supplv
(TOS) in case of supply of vouchers by a supplier, following are the rules:

Clause Case Time of Supply

(a) If the supply is identifiable at the point at which | The date of issuance of voucher
voucher is issued
(b) If the supply is not identifiable at the point at which | The date of redemption of voucher
Voucher is issued

Example8.22:
On lst January,2018 Wardrobe Dry cleaners, Vivek Vihar, have issued vouchers of 74,000 to 'KRVV Limited,
The company 'KRVV Limited' distributed these vouchers amongst its employees. The vouchers
may be
redeemed by the employees latest by 28th February by taking dry-cleaning services from Wardrobe Dry
cleaners, Vivek Vihar. In this example, the vouchers are identifiable with a particular supply of dry
service. Therefore, the date of issue of cleaning
vouchers i.e. Ist January, 2018 shall be the time of supply.
8.5.4 TOS for Residual Cases [Section 13(5)]
Where it is not possible to determine the time of
time of supply shall be as under:
supply as per Section 13(2) or 13(3) or 13(4), the

Clause Case Time of Supply

() Where a periodical return has to be filed The date on which such return is to be filed
In any other case The date on which the tax (i.e. GST) is paid
It is important to note that this
residuary provision is applicable only when the other
found to be inapplicable and not merely when there is some difficulty in provisions are
are sought for by the relevant provision. determining the facts that
8.5.5 TOS in relation to value of Supply by way of Interest, etc. [Section 13(6)]
The provisions for time of supply in case of addition in
value by way of
for delayed payment of consideration are same for interest, late fee/penalty
goods and services.
Section 13(6) prescribes that time of supply in case of addition in
value by of interest, late fee
or penalty for
delayed payment of consideration for a service is the dateway on which the
receives such addition in value. supplier
Example 8.23: [Late fee charged by Mobile service providers]
Mr. Harish could not pay his mobile bill in time. The service
provider, Bharti Airtel has charged 150 as late
fee on account of non-payment of the bill on due date for the month of January 2018. The tinme of supply of
such late fees will be the date on which Bharti Airtel receives the amount of late fee from their customer.
 8.15
SUPPLY OF GOODS OR SERVICES Para 8.6
A.6 TIME OF SUPPLY WHERE
THERE IS CHANGE IN
GUPPLY OF GOODS OR SERVICES ISECTION
RATE OF TAX IN RESPECTr
14]
Notwithstanding anything contained in section 12
changein the
rate ot or section 13, the time of
manner, namely:.-
tax in
respect of goods or services or both, shall supply, where there is a

be determined in the tollowinE

Case I: Where the go0ods or services or both have
been supplied BEFORE the change in
() where the invoice for the rate of tax:
same has been issued and the
change in rate of tax, the time of payment is also
supply shall be the date of reccipt of receivedor alter
the
of issue of invoice,
whichever is earlier; or payment
the date

(i) where the invoice has been issued

after the change in rate of prior to the
change in rate of tax but payment is received
tax, the time of supply shall be the
date of issue of invoice; or
(it) where the payment has been received
same is issued atter the
before the change in rate of tax, but the
invoice for the
of payment.
change in rate of tax, the time of
shall be the supply date ot receipt
Case II: Where the goods or services
both have been
or
supplied AFTER the change in rate of tax:
() where the payment is received after the
change in rate of tax but the invoice has been issued
prior to the change in rate of tax, the time of supply shall be the date of
or of receipt payment;
(i) where the invoice has been issued
and
the time of supply shall be the date payment is received before the change in rate ot tax,
of receipt of payment or date of issue of invoice, which-
ever is earlier; or

(ii) where the invoice has been issued after the

before the change in rate of tax but the
payment received is
change in rate of tax, the time of supply shall be the date of issue of invoice:
Meaning of Date of Receipt of Payment: As
per Explanation to section 14, "the date of of
payment" shall be the date on which the payment is entered in the books of account of receipt
the
payment is credited to his bank account, whichever is earlier. As supplier
or the date on which the

to section 14, the date of per proviso

receipt of payment shall be the date of credit in the bank account if such
credit in the bank account is after four
working days from the date of change in the rate of tax.
Analysis of above provisions
For easy
understanding, the above provisions may be summarized in following tabular form:
Taxable Issue of Receipt of Time of Supply of Service Rate of
Supply Invoice (As Payment (As
has been GST
regards change regards change
provided in effective rate in effective rate
of Tax) of Tax)
BEFORE 1. Date of Payment NEW
change in AFTER AFTER 2. Date of issue of invoice
effective
rate of tax Whichever is earlier
PRIOR AFTER Date of issue of Invoice D
AFTER PRIOR Date of receipt of payment OLD
t means new rate is applicable only when both events (Invoice & Payment) are after Change