Ch 19 - Time of Supply of Goods and Services | GST Saral by CA Dhruv Aggarwal PDF Download

 Page 1


CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
 
 
 
 
 
 
 
 
 
 
CHAPTER 19 - Ti me of suppl y of goods and servi ces 
 
 
 
 
 
CHAPTER 19 
 
Time of supply of goods and services 
 
EXECUTIVE SUMMARY 
 
?   The provision of 'Time of Supply' determine when tax becomes payable and what would be rate at 
which GST is payable. 
?   Genera ly, GST is payable when supply is made or when payment is received, whichever is earlier. 
?   GST is payable when advance received from recipient, even if supply is to be made later. However, 
GST is not payable on 'adjustable deposit'. 
?   GST is payable on monthly basis by 20th of fo lowing month. Monthly return is also required to be 
f iled on same day. 
?   Sma l taxable persons have to f ile quarterly return and pay tax on quarterly basis 
19.1 Liability of GST on basis of time of supply 
 
The liability to pay CGST/SGST on the goods and services shall arise at the time of supply of goods and 
services, as determined in accordance with provisions of section 12 of CGST Act - section 12(1) of CGST 
Act. 
Major  change  is in  respect  of payment  of GST on  advances  received  - One major departure  from 
existing provisions is that GST on goods and services is payable when advance is received. Presently, there is 
such provision in respect of service tax but not in case of Central Excise, CST or State Vat. 
19.2 Time of supply of goods 
 
The time of supply of goods shall be the earlier of the fo lowing dates [section 12(2) of CGST Act]- 
 
(a)   the date of issue of i nvoice by the supplier or the last date on which he is required, under section 
31(1) of CGST Act, 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. 
GST if advance upto Rs 1,000 received can be paid at the time of issue of invoice - Where the supplier 
of taxable goods receives an amount up to one thousand rupees in excess of the amount indicated in the tax 
i nvoice, the time of supply to the extent of such excess sha l, at the option of the said supplier, be the date of 
issue of invoice - proviso to section 12(1) of CGST Act. 
Thus, if advance upto Rs 1,000 is received, GST is not payable at that stage. In that case, GST will be 
payable when invoice is raised. 
19.2-1 Explanations relating to aforesaid provisions 
 
Explanation 1.—For the purposes of clauses (a) and (b), 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. 
Explanation 2.—For the purpose of clause (b), "the date on which the supplier receives the payment" shall be 
Page 2


CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
 
 
 
 
 
 
 
 
 
 
CHAPTER 19 - Ti me of suppl y of goods and servi ces 
 
 
 
 
 
CHAPTER 19 
 
Time of supply of goods and services 
 
EXECUTIVE SUMMARY 
 
?   The provision of 'Time of Supply' determine when tax becomes payable and what would be rate at 
which GST is payable. 
?   Genera ly, GST is payable when supply is made or when payment is received, whichever is earlier. 
?   GST is payable when advance received from recipient, even if supply is to be made later. However, 
GST is not payable on 'adjustable deposit'. 
?   GST is payable on monthly basis by 20th of fo lowing month. Monthly return is also required to be 
f iled on same day. 
?   Sma l taxable persons have to f ile quarterly return and pay tax on quarterly basis 
19.1 Liability of GST on basis of time of supply 
 
The liability to pay CGST/SGST on the goods and services shall arise at the time of supply of goods and 
services, as determined in accordance with provisions of section 12 of CGST Act - section 12(1) of CGST 
Act. 
Major  change  is in  respect  of payment  of GST on  advances  received  - One major departure  from 
existing provisions is that GST on goods and services is payable when advance is received. Presently, there is 
such provision in respect of service tax but not in case of Central Excise, CST or State Vat. 
19.2 Time of supply of goods 
 
The time of supply of goods shall be the earlier of the fo lowing dates [section 12(2) of CGST Act]- 
 
(a)   the date of issue of i nvoice by the supplier or the last date on which he is required, under section 
31(1) of CGST Act, 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. 
GST if advance upto Rs 1,000 received can be paid at the time of issue of invoice - Where the supplier 
of taxable goods receives an amount up to one thousand rupees in excess of the amount indicated in the tax 
i nvoice, the time of supply to the extent of such excess sha l, at the option of the said supplier, be the date of 
issue of invoice - proviso to section 12(1) of CGST Act. 
Thus, if advance upto Rs 1,000 is received, GST is not payable at that stage. In that case, GST will be 
payable when invoice is raised. 
19.2-1 Explanations relating to aforesaid provisions 
 
Explanation 1.—For the purposes of clauses (a) and (b), 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. 
Explanation 2.—For the purpose of clause (b), "the date on which the supplier receives the payment" shall be 
CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
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. 
19.2-2 Meaning of removal of goods 
 
As per section 31(1) of CGST Act, registered person is required to issue tax invoice before or at the time of 
removal of goods for supply to recipient or delivery of goods or making goods available to recipient. 
"Removal'', in relation to goods, means - (a) dispatch of the goods for delivery by the supplier thereof or by 
any other person acting on behalf of such supplier, or (b) co lection of the goods by the recipient thereof or by 
any other person acting on behalf of such recipient - section 2(95) of CGST Act. 
19.2-3 Meaning of 'supplier' 
 
"Supplier" in relation to any goods or services or both shall mean the person supplying the said goods or 
services or both and shall include an agent acting as such on behalf of such supplier in relation to the goods or 
services or both supplied - section 2(105) of CGST Act. 
19.2-4 Meaning of 'recipient' 
 
As per section 2(93) of CGST Act, "recipient" of supply of goods or services or both means— 
 
(a)   where a consideration is payable for the supply of goods or services or both, the person who is 
liable to pay that consideration. 
(b)   where no consideration is payable for the supply of goods, the person to whom the goods are 
delivered or made available, or to whom possession or use of the goods is given or made available, 
and 
(c)   where no consideration is payable for the supply of a service, the person to whom the service is 
rendered. 
Any reference to a person to whom a supply is made shall be construed as a reference to the recipient of the 
supply and shall include an agent acting as such on behalf of the recipient in relation to the goods or services or 
both supplied. 
19.3 Time of supply when GST on goods payable  on reverse charge basis 
 
As per section 12(3) of CGST Act, 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 earliest of the fo lowing dates — 
 
(a)   the date of the receipt of 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 fo lowing thirty days from the date of issue of invoice or any other document, 
by whatever name ca led, by the supplier. 
Where it is not possible to determine the time of supply under clause (a), (b) or (c), the time of supply shall be 
the date of entry in the books of account of the recipient of supply. 
19.4 Time of supply in case of supply of vouchers for goods 
 
In case of supply of vouchers by a supplier, the time of supply shall be - (a) the date of issue of voucher, if the 
supply is identifiable at that point; or (b) the date of redemption of voucher, in a l other cases - section 12(4) of 
CGST Act. 
"Voucher" means an instrument where there is an obligation to accept it as consideration or part consideration 
for a supply of goods or services or both and where the goods or services or both to be supplied or the 
Page 3


CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
 
 
 
 
 
 
 
 
 
 
CHAPTER 19 - Ti me of suppl y of goods and servi ces 
 
 
 
 
 
CHAPTER 19 
 
Time of supply of goods and services 
 
EXECUTIVE SUMMARY 
 
?   The provision of 'Time of Supply' determine when tax becomes payable and what would be rate at 
which GST is payable. 
?   Genera ly, GST is payable when supply is made or when payment is received, whichever is earlier. 
?   GST is payable when advance received from recipient, even if supply is to be made later. However, 
GST is not payable on 'adjustable deposit'. 
?   GST is payable on monthly basis by 20th of fo lowing month. Monthly return is also required to be 
f iled on same day. 
?   Sma l taxable persons have to f ile quarterly return and pay tax on quarterly basis 
19.1 Liability of GST on basis of time of supply 
 
The liability to pay CGST/SGST on the goods and services shall arise at the time of supply of goods and 
services, as determined in accordance with provisions of section 12 of CGST Act - section 12(1) of CGST 
Act. 
Major  change  is in  respect  of payment  of GST on  advances  received  - One major departure  from 
existing provisions is that GST on goods and services is payable when advance is received. Presently, there is 
such provision in respect of service tax but not in case of Central Excise, CST or State Vat. 
19.2 Time of supply of goods 
 
The time of supply of goods shall be the earlier of the fo lowing dates [section 12(2) of CGST Act]- 
 
(a)   the date of issue of i nvoice by the supplier or the last date on which he is required, under section 
31(1) of CGST Act, 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. 
GST if advance upto Rs 1,000 received can be paid at the time of issue of invoice - Where the supplier 
of taxable goods receives an amount up to one thousand rupees in excess of the amount indicated in the tax 
i nvoice, the time of supply to the extent of such excess sha l, at the option of the said supplier, be the date of 
issue of invoice - proviso to section 12(1) of CGST Act. 
Thus, if advance upto Rs 1,000 is received, GST is not payable at that stage. In that case, GST will be 
payable when invoice is raised. 
19.2-1 Explanations relating to aforesaid provisions 
 
Explanation 1.—For the purposes of clauses (a) and (b), 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. 
Explanation 2.—For the purpose of clause (b), "the date on which the supplier receives the payment" shall be 
CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
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. 
19.2-2 Meaning of removal of goods 
 
As per section 31(1) of CGST Act, registered person is required to issue tax invoice before or at the time of 
removal of goods for supply to recipient or delivery of goods or making goods available to recipient. 
"Removal'', in relation to goods, means - (a) dispatch of the goods for delivery by the supplier thereof or by 
any other person acting on behalf of such supplier, or (b) co lection of the goods by the recipient thereof or by 
any other person acting on behalf of such recipient - section 2(95) of CGST Act. 
19.2-3 Meaning of 'supplier' 
 
"Supplier" in relation to any goods or services or both shall mean the person supplying the said goods or 
services or both and shall include an agent acting as such on behalf of such supplier in relation to the goods or 
services or both supplied - section 2(105) of CGST Act. 
19.2-4 Meaning of 'recipient' 
 
As per section 2(93) of CGST Act, "recipient" of supply of goods or services or both means— 
 
(a)   where a consideration is payable for the supply of goods or services or both, the person who is 
liable to pay that consideration. 
(b)   where no consideration is payable for the supply of goods, the person to whom the goods are 
delivered or made available, or to whom possession or use of the goods is given or made available, 
and 
(c)   where no consideration is payable for the supply of a service, the person to whom the service is 
rendered. 
Any reference to a person to whom a supply is made shall be construed as a reference to the recipient of the 
supply and shall include an agent acting as such on behalf of the recipient in relation to the goods or services or 
both supplied. 
19.3 Time of supply when GST on goods payable  on reverse charge basis 
 
As per section 12(3) of CGST Act, 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 earliest of the fo lowing dates — 
 
(a)   the date of the receipt of 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 fo lowing thirty days from the date of issue of invoice or any other document, 
by whatever name ca led, by the supplier. 
Where it is not possible to determine the time of supply under clause (a), (b) or (c), the time of supply shall be 
the date of entry in the books of account of the recipient of supply. 
19.4 Time of supply in case of supply of vouchers for goods 
 
In case of supply of vouchers by a supplier, the time of supply shall be - (a) the date of issue of voucher, if the 
supply is identifiable at that point; or (b) the date of redemption of voucher, in a l other cases - section 12(4) of 
CGST Act. 
"Voucher" means an instrument where there is an obligation to accept it as consideration or part consideration 
for a supply of goods or services or both and where the goods or services or both to be supplied or the 
CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
identities of their potential suppliers are either indicated on the instrument itself or in related documentation, 
including the terms and conditions of use of such instrument - section 2(118) of CGST Act. 
19.5 Time of supply in other situations 
 
In case it is not possible to determine the time of supply under any of aforesaid provisions, the time of supply 
shall - (a) in a case where a periodical return has to be f iled, be the date on which such return is to be f iled, or 
(b) in any other case, be the date on which the CGST/SGST is paid - section 12(5) of CGST Act. 
19.5-1 Time of supply when interest, late fee or penalty  for late payment is received 
 
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 - section 12(6) of CGST Act. 
This is sma l mercy. Otherwise, they would have asked taxable person to pay GST as soon as demand of 
interest, late fee or penalty is issued to recipient. 
19.6 Time of supply of services 
 
The liability to pay CGST/SGST on services shall arise at the time of supply as determined in terms of the 
provisions of section 13 - section 13(1) of CGST Act. 
As per section 13(2) of CGST Act, the time of supply of services shall be the earliest of the fo lowing dates, 
namely:— 
 
(a)   the date of issue of invoice by the supplier, if the invoice is issued within the period prescribed under 
section 31(2) of CGST Act or the date of receipt of payment, whichever is earlier; or 
(b)   the date of provision of service, if the invoice is not issued within the period prescribed under section 
31(2) or the date of receipt of payment, whichever is earlier; or 
(c)   the 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. 
Explanation .—For the purposes of clauses (a) and (b) (i) the supply shall be deemed to have been made to 
the extent it is covered by the i nvoice or, as the case may be, the payment ( i) "the date of receipt of payment" 
shall be the date on which the payment is entered in the books of account of the supplier or the date on which 
the payment is credited to his bank account, whichever is earlier. 
GST if advance upto Rs 1,000 received can be paid at the time of issue of invoice - Where the supplier 
of taxable services receives an amount up to one thousand rupees in excess of the amount indicated in the tax 
i nvoice, the time of supply to the extent of such excess sha l, at the option of the said supplier, be the date of 
issue of invoice relating to such excess payment - proviso to section 13(2) of CGST Act. 
Thus, if advance upto Rs 1,000 is received, GST is not payable at that stage. In that case, GST will be 
payable when invoice is raised. 
19.7 Time of supply of service when GST on services is payable  on basis of reverse charge 
 
As per section 13(3) of CGST Act, 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 earliest of the fo lowing dates— 
 
(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 fo lowing sixty days from the date of issue of invoice or any other document, by 
whatever name ca led, in lieu thereof by the supplier. 
Page 4


CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
 
 
 
 
 
 
 
 
 
 
CHAPTER 19 - Ti me of suppl y of goods and servi ces 
 
 
 
 
 
CHAPTER 19 
 
Time of supply of goods and services 
 
EXECUTIVE SUMMARY 
 
?   The provision of 'Time of Supply' determine when tax becomes payable and what would be rate at 
which GST is payable. 
?   Genera ly, GST is payable when supply is made or when payment is received, whichever is earlier. 
?   GST is payable when advance received from recipient, even if supply is to be made later. However, 
GST is not payable on 'adjustable deposit'. 
?   GST is payable on monthly basis by 20th of fo lowing month. Monthly return is also required to be 
f iled on same day. 
?   Sma l taxable persons have to f ile quarterly return and pay tax on quarterly basis 
19.1 Liability of GST on basis of time of supply 
 
The liability to pay CGST/SGST on the goods and services shall arise at the time of supply of goods and 
services, as determined in accordance with provisions of section 12 of CGST Act - section 12(1) of CGST 
Act. 
Major  change  is in  respect  of payment  of GST on  advances  received  - One major departure  from 
existing provisions is that GST on goods and services is payable when advance is received. Presently, there is 
such provision in respect of service tax but not in case of Central Excise, CST or State Vat. 
19.2 Time of supply of goods 
 
The time of supply of goods shall be the earlier of the fo lowing dates [section 12(2) of CGST Act]- 
 
(a)   the date of issue of i nvoice by the supplier or the last date on which he is required, under section 
31(1) of CGST Act, 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. 
GST if advance upto Rs 1,000 received can be paid at the time of issue of invoice - Where the supplier 
of taxable goods receives an amount up to one thousand rupees in excess of the amount indicated in the tax 
i nvoice, the time of supply to the extent of such excess sha l, at the option of the said supplier, be the date of 
issue of invoice - proviso to section 12(1) of CGST Act. 
Thus, if advance upto Rs 1,000 is received, GST is not payable at that stage. In that case, GST will be 
payable when invoice is raised. 
19.2-1 Explanations relating to aforesaid provisions 
 
Explanation 1.—For the purposes of clauses (a) and (b), 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. 
Explanation 2.—For the purpose of clause (b), "the date on which the supplier receives the payment" shall be 
CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
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. 
19.2-2 Meaning of removal of goods 
 
As per section 31(1) of CGST Act, registered person is required to issue tax invoice before or at the time of 
removal of goods for supply to recipient or delivery of goods or making goods available to recipient. 
"Removal'', in relation to goods, means - (a) dispatch of the goods for delivery by the supplier thereof or by 
any other person acting on behalf of such supplier, or (b) co lection of the goods by the recipient thereof or by 
any other person acting on behalf of such recipient - section 2(95) of CGST Act. 
19.2-3 Meaning of 'supplier' 
 
"Supplier" in relation to any goods or services or both shall mean the person supplying the said goods or 
services or both and shall include an agent acting as such on behalf of such supplier in relation to the goods or 
services or both supplied - section 2(105) of CGST Act. 
19.2-4 Meaning of 'recipient' 
 
As per section 2(93) of CGST Act, "recipient" of supply of goods or services or both means— 
 
(a)   where a consideration is payable for the supply of goods or services or both, the person who is 
liable to pay that consideration. 
(b)   where no consideration is payable for the supply of goods, the person to whom the goods are 
delivered or made available, or to whom possession or use of the goods is given or made available, 
and 
(c)   where no consideration is payable for the supply of a service, the person to whom the service is 
rendered. 
Any reference to a person to whom a supply is made shall be construed as a reference to the recipient of the 
supply and shall include an agent acting as such on behalf of the recipient in relation to the goods or services or 
both supplied. 
19.3 Time of supply when GST on goods payable  on reverse charge basis 
 
As per section 12(3) of CGST Act, 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 earliest of the fo lowing dates — 
 
(a)   the date of the receipt of 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 fo lowing thirty days from the date of issue of invoice or any other document, 
by whatever name ca led, by the supplier. 
Where it is not possible to determine the time of supply under clause (a), (b) or (c), the time of supply shall be 
the date of entry in the books of account of the recipient of supply. 
19.4 Time of supply in case of supply of vouchers for goods 
 
In case of supply of vouchers by a supplier, the time of supply shall be - (a) the date of issue of voucher, if the 
supply is identifiable at that point; or (b) the date of redemption of voucher, in a l other cases - section 12(4) of 
CGST Act. 
"Voucher" means an instrument where there is an obligation to accept it as consideration or part consideration 
for a supply of goods or services or both and where the goods or services or both to be supplied or the 
CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
identities of their potential suppliers are either indicated on the instrument itself or in related documentation, 
including the terms and conditions of use of such instrument - section 2(118) of CGST Act. 
19.5 Time of supply in other situations 
 
In case it is not possible to determine the time of supply under any of aforesaid provisions, the time of supply 
shall - (a) in a case where a periodical return has to be f iled, be the date on which such return is to be f iled, or 
(b) in any other case, be the date on which the CGST/SGST is paid - section 12(5) of CGST Act. 
19.5-1 Time of supply when interest, late fee or penalty  for late payment is received 
 
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 - section 12(6) of CGST Act. 
This is sma l mercy. Otherwise, they would have asked taxable person to pay GST as soon as demand of 
interest, late fee or penalty is issued to recipient. 
19.6 Time of supply of services 
 
The liability to pay CGST/SGST on services shall arise at the time of supply as determined in terms of the 
provisions of section 13 - section 13(1) of CGST Act. 
As per section 13(2) of CGST Act, the time of supply of services shall be the earliest of the fo lowing dates, 
namely:— 
 
(a)   the date of issue of invoice by the supplier, if the invoice is issued within the period prescribed under 
section 31(2) of CGST Act or the date of receipt of payment, whichever is earlier; or 
(b)   the date of provision of service, if the invoice is not issued within the period prescribed under section 
31(2) or the date of receipt of payment, whichever is earlier; or 
(c)   the 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. 
Explanation .—For the purposes of clauses (a) and (b) (i) the supply shall be deemed to have been made to 
the extent it is covered by the i nvoice or, as the case may be, the payment ( i) "the date of receipt of payment" 
shall be the date on which the payment is entered in the books of account of the supplier or the date on which 
the payment is credited to his bank account, whichever is earlier. 
GST if advance upto Rs 1,000 received can be paid at the time of issue of invoice - Where the supplier 
of taxable services receives an amount up to one thousand rupees in excess of the amount indicated in the tax 
i nvoice, the time of supply to the extent of such excess sha l, at the option of the said supplier, be the date of 
issue of invoice relating to such excess payment - proviso to section 13(2) of CGST Act. 
Thus, if advance upto Rs 1,000 is received, GST is not payable at that stage. In that case, GST will be 
payable when invoice is raised. 
19.7 Time of supply of service when GST on services is payable  on basis of reverse charge 
 
As per section 13(3) of CGST Act, 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 earliest of the fo lowing dates— 
 
(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 fo lowing sixty days from the date of issue of invoice or any other document, by 
whatever name ca led, in lieu thereof by the supplier. 
CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
Where it is not possible to determine the time of supply under clause (a) or (b), the time of supply shall be the 
date of entry in the books of account of the recipient of supply - first proviso to section 13(3) of CGST Act. 
19.8 Time  of supply  in reverse charge when service  received from Associated  Enterprise outside 
India 
 
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 - second proviso to section 13(3) of CGST Act. 
"Associated enterprise" shall have the meaning assi gned to it in section 92A of the Income Tax Act, 1961. 
 
In case  the  associated  enterprise  is  situated  in India,  no  separate  provision  has  been made  as  normal 
provisions of time of supply apply. 
19.8-1 Meaning of 'Associated Enterprises' 
 
Associated Enterprise has the meaning assigned to it in section 92A of Income Tax Act, 1961 The definition is 
so broad that genera ly, group companies will fa l in at least one of the 13 clauses specified in section 92A(2) 
of Income Tax Act. 
As per section 92A(1) of Income Tax Act, an enterprise would be regarded as an associated enterprise of 
another enterprise, if (a) it participates, directly or indirectly, or through one or more intermediaries,  in the 
management or control or capital of the other enterprise; or (b) in respect of it, one or more persons who 
participate,  directly or indirectly,  or through one or more intermediaries,  in its management  or control or 
capital, are the same persons who participate, directly or indirectly, or through one or more intermediaries, in 
the management or control or capital of the other enterprise. 
Section 92A(1)(a)  of Income  Tax Act  applies  when there  is  participation  by one  enterprise  into  other 
enterprise. 
Section 92A(1)(b) of Income Tax Act applies when there is participation by a third enterprise into both the 
enterprises. 
Section 92A(2) of Income Tax Act provides that two enterprises shall be deemed to be associated enterprises 
if for the purpose of section 92A(1), the two enterprises satisfy, at any time during the previous year, any of 
the fo lowing conditions - 
 
?   one enterprise holds (directly or indirectly) shares carrying not less than twenty-six per cent of the 
voting power in the other enterprise [section 92A(2)(a)] 
?   any person or enterprise holds (directly or indirectly) shares carrying not less than twenty-six per 
cent of the voting power in each of such enterprises [section 92A(2)(b)]; or 
?   a loan advanced by one enterprise to the other enterprise constitutes not less than fifty-one per cent 
of the book value of the total assets of the other enterprise [section 92A(2)(c)]; or 
?   one enterprise guarantees not less than ten per cent of the total borrowings of the other enterprise 
[section 92A(2)(d)]; or 
?   more than half of the board  of directors  or members  of the governing board,  or one or more 
executive directors or executive members of the governing board of one enterprise, are appointed by 
the other enterprise [section 92A(2)(e)]; or 
?   more than half of the directors or members of the governing board, or one or more of the executive 
directors or members of the governing board, of each of the two enterprises are appointed by the 
same person or persons [section 92A(2)(f)]; or 
Page 5


CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
 
 
 
 
 
 
 
 
 
 
CHAPTER 19 - Ti me of suppl y of goods and servi ces 
 
 
 
 
 
CHAPTER 19 
 
Time of supply of goods and services 
 
EXECUTIVE SUMMARY 
 
?   The provision of 'Time of Supply' determine when tax becomes payable and what would be rate at 
which GST is payable. 
?   Genera ly, GST is payable when supply is made or when payment is received, whichever is earlier. 
?   GST is payable when advance received from recipient, even if supply is to be made later. However, 
GST is not payable on 'adjustable deposit'. 
?   GST is payable on monthly basis by 20th of fo lowing month. Monthly return is also required to be 
f iled on same day. 
?   Sma l taxable persons have to f ile quarterly return and pay tax on quarterly basis 
19.1 Liability of GST on basis of time of supply 
 
The liability to pay CGST/SGST on the goods and services shall arise at the time of supply of goods and 
services, as determined in accordance with provisions of section 12 of CGST Act - section 12(1) of CGST 
Act. 
Major  change  is in  respect  of payment  of GST on  advances  received  - One major departure  from 
existing provisions is that GST on goods and services is payable when advance is received. Presently, there is 
such provision in respect of service tax but not in case of Central Excise, CST or State Vat. 
19.2 Time of supply of goods 
 
The time of supply of goods shall be the earlier of the fo lowing dates [section 12(2) of CGST Act]- 
 
(a)   the date of issue of i nvoice by the supplier or the last date on which he is required, under section 
31(1) of CGST Act, 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. 
GST if advance upto Rs 1,000 received can be paid at the time of issue of invoice - Where the supplier 
of taxable goods receives an amount up to one thousand rupees in excess of the amount indicated in the tax 
i nvoice, the time of supply to the extent of such excess sha l, at the option of the said supplier, be the date of 
issue of invoice - proviso to section 12(1) of CGST Act. 
Thus, if advance upto Rs 1,000 is received, GST is not payable at that stage. In that case, GST will be 
payable when invoice is raised. 
19.2-1 Explanations relating to aforesaid provisions 
 
Explanation 1.—For the purposes of clauses (a) and (b), 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. 
Explanation 2.—For the purpose of clause (b), "the date on which the supplier receives the payment" shall be 
CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
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. 
19.2-2 Meaning of removal of goods 
 
As per section 31(1) of CGST Act, registered person is required to issue tax invoice before or at the time of 
removal of goods for supply to recipient or delivery of goods or making goods available to recipient. 
"Removal'', in relation to goods, means - (a) dispatch of the goods for delivery by the supplier thereof or by 
any other person acting on behalf of such supplier, or (b) co lection of the goods by the recipient thereof or by 
any other person acting on behalf of such recipient - section 2(95) of CGST Act. 
19.2-3 Meaning of 'supplier' 
 
"Supplier" in relation to any goods or services or both shall mean the person supplying the said goods or 
services or both and shall include an agent acting as such on behalf of such supplier in relation to the goods or 
services or both supplied - section 2(105) of CGST Act. 
19.2-4 Meaning of 'recipient' 
 
As per section 2(93) of CGST Act, "recipient" of supply of goods or services or both means— 
 
(a)   where a consideration is payable for the supply of goods or services or both, the person who is 
liable to pay that consideration. 
(b)   where no consideration is payable for the supply of goods, the person to whom the goods are 
delivered or made available, or to whom possession or use of the goods is given or made available, 
and 
(c)   where no consideration is payable for the supply of a service, the person to whom the service is 
rendered. 
Any reference to a person to whom a supply is made shall be construed as a reference to the recipient of the 
supply and shall include an agent acting as such on behalf of the recipient in relation to the goods or services or 
both supplied. 
19.3 Time of supply when GST on goods payable  on reverse charge basis 
 
As per section 12(3) of CGST Act, 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 earliest of the fo lowing dates — 
 
(a)   the date of the receipt of 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 fo lowing thirty days from the date of issue of invoice or any other document, 
by whatever name ca led, by the supplier. 
Where it is not possible to determine the time of supply under clause (a), (b) or (c), the time of supply shall be 
the date of entry in the books of account of the recipient of supply. 
19.4 Time of supply in case of supply of vouchers for goods 
 
In case of supply of vouchers by a supplier, the time of supply shall be - (a) the date of issue of voucher, if the 
supply is identifiable at that point; or (b) the date of redemption of voucher, in a l other cases - section 12(4) of 
CGST Act. 
"Voucher" means an instrument where there is an obligation to accept it as consideration or part consideration 
for a supply of goods or services or both and where the goods or services or both to be supplied or the 
CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
identities of their potential suppliers are either indicated on the instrument itself or in related documentation, 
including the terms and conditions of use of such instrument - section 2(118) of CGST Act. 
19.5 Time of supply in other situations 
 
In case it is not possible to determine the time of supply under any of aforesaid provisions, the time of supply 
shall - (a) in a case where a periodical return has to be f iled, be the date on which such return is to be f iled, or 
(b) in any other case, be the date on which the CGST/SGST is paid - section 12(5) of CGST Act. 
19.5-1 Time of supply when interest, late fee or penalty  for late payment is received 
 
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 - section 12(6) of CGST Act. 
This is sma l mercy. Otherwise, they would have asked taxable person to pay GST as soon as demand of 
interest, late fee or penalty is issued to recipient. 
19.6 Time of supply of services 
 
The liability to pay CGST/SGST on services shall arise at the time of supply as determined in terms of the 
provisions of section 13 - section 13(1) of CGST Act. 
As per section 13(2) of CGST Act, the time of supply of services shall be the earliest of the fo lowing dates, 
namely:— 
 
(a)   the date of issue of invoice by the supplier, if the invoice is issued within the period prescribed under 
section 31(2) of CGST Act or the date of receipt of payment, whichever is earlier; or 
(b)   the date of provision of service, if the invoice is not issued within the period prescribed under section 
31(2) or the date of receipt of payment, whichever is earlier; or 
(c)   the 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. 
Explanation .—For the purposes of clauses (a) and (b) (i) the supply shall be deemed to have been made to 
the extent it is covered by the i nvoice or, as the case may be, the payment ( i) "the date of receipt of payment" 
shall be the date on which the payment is entered in the books of account of the supplier or the date on which 
the payment is credited to his bank account, whichever is earlier. 
GST if advance upto Rs 1,000 received can be paid at the time of issue of invoice - Where the supplier 
of taxable services receives an amount up to one thousand rupees in excess of the amount indicated in the tax 
i nvoice, the time of supply to the extent of such excess sha l, at the option of the said supplier, be the date of 
issue of invoice relating to such excess payment - proviso to section 13(2) of CGST Act. 
Thus, if advance upto Rs 1,000 is received, GST is not payable at that stage. In that case, GST will be 
payable when invoice is raised. 
19.7 Time of supply of service when GST on services is payable  on basis of reverse charge 
 
As per section 13(3) of CGST Act, 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 earliest of the fo lowing dates— 
 
(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 fo lowing sixty days from the date of issue of invoice or any other document, by 
whatever name ca led, in lieu thereof by the supplier. 
CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
Where it is not possible to determine the time of supply under clause (a) or (b), the time of supply shall be the 
date of entry in the books of account of the recipient of supply - first proviso to section 13(3) of CGST Act. 
19.8 Time  of supply  in reverse charge when service  received from Associated  Enterprise outside 
India 
 
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 - second proviso to section 13(3) of CGST Act. 
"Associated enterprise" shall have the meaning assi gned to it in section 92A of the Income Tax Act, 1961. 
 
In case  the  associated  enterprise  is  situated  in India,  no  separate  provision  has  been made  as  normal 
provisions of time of supply apply. 
19.8-1 Meaning of 'Associated Enterprises' 
 
Associated Enterprise has the meaning assigned to it in section 92A of Income Tax Act, 1961 The definition is 
so broad that genera ly, group companies will fa l in at least one of the 13 clauses specified in section 92A(2) 
of Income Tax Act. 
As per section 92A(1) of Income Tax Act, an enterprise would be regarded as an associated enterprise of 
another enterprise, if (a) it participates, directly or indirectly, or through one or more intermediaries,  in the 
management or control or capital of the other enterprise; or (b) in respect of it, one or more persons who 
participate,  directly or indirectly,  or through one or more intermediaries,  in its management  or control or 
capital, are the same persons who participate, directly or indirectly, or through one or more intermediaries, in 
the management or control or capital of the other enterprise. 
Section 92A(1)(a)  of Income  Tax Act  applies  when there  is  participation  by one  enterprise  into  other 
enterprise. 
Section 92A(1)(b) of Income Tax Act applies when there is participation by a third enterprise into both the 
enterprises. 
Section 92A(2) of Income Tax Act provides that two enterprises shall be deemed to be associated enterprises 
if for the purpose of section 92A(1), the two enterprises satisfy, at any time during the previous year, any of 
the fo lowing conditions - 
 
?   one enterprise holds (directly or indirectly) shares carrying not less than twenty-six per cent of the 
voting power in the other enterprise [section 92A(2)(a)] 
?   any person or enterprise holds (directly or indirectly) shares carrying not less than twenty-six per 
cent of the voting power in each of such enterprises [section 92A(2)(b)]; or 
?   a loan advanced by one enterprise to the other enterprise constitutes not less than fifty-one per cent 
of the book value of the total assets of the other enterprise [section 92A(2)(c)]; or 
?   one enterprise guarantees not less than ten per cent of the total borrowings of the other enterprise 
[section 92A(2)(d)]; or 
?   more than half of the board  of directors  or members  of the governing board,  or one or more 
executive directors or executive members of the governing board of one enterprise, are appointed by 
the other enterprise [section 92A(2)(e)]; or 
?   more than half of the directors or members of the governing board, or one or more of the executive 
directors or members of the governing board, of each of the two enterprises are appointed by the 
same person or persons [section 92A(2)(f)]; or 
CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
?   the manufacture or processing of goods or articles or business carried out by one enterprise is who ly 
dependent on the use of know-how, patents, copyri ghts, trade-marks, licences, franchises or any 
other  business  or commercial ri ghts  of similar  nature,  or any data,  documentation,  drawing or 
specification relating to any patent, invention, model, design, secret formula or process, of which the 
other enterprise is the owner or in respect of which the other enterprise has exclusive rights [section 
92A(2)(g)]; or 
?   ninety per cent or more of the raw materials  and consumables  required  for the manufacture  or 
processing of goods or articles carried out by one enterprise, are supplied by the other enterprise, or 
by persons specified by the other enterprise,  and the prices and other conditions relating to the 
supply are influenced by such other enterprise [section 92A(2)(h)]; or 
?   the goods or articles manufactured or processed by one enterprise, are sold to the other enterprise 
or to persons specified by the other enterprise, and the prices and other conditions relating thereto 
are influenced by such other enterprise [section 92A(2)(i)]; or 
?   where one enterprise is contro led by an individual, the other enterprise is also contro led by such 
individual or his relative or jointly by such individual and relative of such individual [section 92A(2) 
(j)]; or 
?   where one enterprise is contro led by a Hindu undivided family, the other enterprise is contro led by 
a member of such Hindu undivided family, or by a relative of a member of such Hindu undivided 
family, or jointly by such member and his relative [section 92A(2)(k)]; or 
?   where one enterprise is a firm, association of persons or body of individuals, the other enterprise 
holds not less than ten per cent interest in such firm, association of persons or body of individuals 
[section 92A(2)(l)]; or 
?   there exists between the two enterprises, any relationship of mutual interest, as may be prescribed 
[section 92A(2)(m)] 
19.9 Supply of voucher for services 
 
In case of supply of vouchers by a supplier, the time of supply shall be- (a) the date of issue of voucher, if the 
supply is identifiable at that point; or(b) the date of redemption of voucher, in a l other cases - section 13(4) of 
CGST Act. 
19.10 Time of supply of service in other cases 
 
Where it is not possible to determine the time of supply of services in any of the above manner. The time of 
supply shall (a) in a case where a periodical return has to be f iled, be the date on which such return is to be 
f iled; or (b) in any other case, be the date on which the CGST/SGST is paid - section 13(5) of CGST Act. 
19.11 Time of supply when interest, late fee or penalty  for late payment is received 
 
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 - section 13(6) of CGST Act. 
This is sma l mercy. Otherwise, they would have asked taxable person to pay GST as soon as demand of 
interest, late fee or penalty is issued to recipient. 
19.12 Time of supply in case of change  in rate of tax in respect of supply of services 
 
In cases where there is a change in the effective rate of tax in respect of services, time of supply shall be 
determined in the fo lowing manner, as per section 14 of CGST Act. 
Taxable service provided before change  in effective rate -in case the taxable service has been provided