GST & Compliance

What is time of supply under GST?

Time of supply decides when GST becomes payable and which tax period a sale belongs to. See the rules for goods, services, advances, reverse charge and rate changes.

Time of supply under GST is the point in time when the law treats a supply as made, and so the point when your liability to pay GST arises. It decides which tax period a sale belongs to, which return it goes into, and, when GST rates change, which rate applies.

The rules are in Sections 12, 13 and 14 of the CGST Act, 2017. Section 20 of the IGST Act applies the same rules to inter-state supplies. This guide explains them in plain language for Indian MSMEs, with invoice examples. It is updated 13 October 2026. It is an explainer, not tax advice. Confirm unusual cases with your chartered accountant.

Time of supply, place of supply and invoice date

These three ideas sit on every GST invoice, and they answer different questions:

Time of supply: When is GST payable? It fixes the tax period.
Place of supply: Where is the supply made? It decides CGST + SGST or IGST.
Invoice date: When did you issue the invoice? Section 31 sets the deadline for issuing it, and that deadline feeds into the time of supply rules below.

A useful shortcut: if you issue invoices on time, the invoice date is usually the time of supply for goods. For services, an advance received before the invoice can come first.

When is payment "received"?

Several rules below use the date the supplier receives payment. Under GST, that is the earlier of two dates: the date the payment is entered in your books of account, or the date it is credited to your bank account.

Time of supply of goods (Section 12)

The default rule is the earliest of:

the date you issue the invoice, or the last date by which you were legally required to issue it; and
the date you receive payment.

For goods, the invoice is due before or at the time the goods are removed for delivery. Where goods do not move, it is due before or at the time they are delivered or made available to the buyer.

Advances for goods. Notification No. 66/2017-Central Tax (15 November 2017) changed how this works in practice. Registered suppliers of goods, other than composition taxpayers, pay GST on goods at the time of issue of the invoice, not when an advance is received. So a regular trader who takes an advance for goods does not pay GST on the advance. Tax becomes payable when the invoice is issued.

Time of supply of services (Section 13)

The default rule is the earliest of:

the date of the invoice, if you issued it within the time allowed under Section 31, or the date you receive payment, whichever is earlier;
the date the service was provided, if you did not issue the invoice within the time allowed, or the date you receive payment, whichever is earlier;
the date the recipient shows the service in their books of account, if neither of the above applies.

For most services, the invoice is due within 30 days from the date the service is provided. Some notified sectors have a different time limit, so check yours.

Unlike goods, advances for services attract GST when they are received. The supply is treated as made to the extent the advance covers it.

Small excess payments (up to ₹1,000)

If a customer pays up to ₹1,000 more than the invoice amount, you may choose the date of the next invoice for that excess as its time of supply, instead of the date you received it. This saves you from raising a separate tax entry for small overpayments.

Time of supply under reverse charge

When you, the recipient, pay GST under reverse charge, the dates are counted from your side.

For goods, the time of supply is the earliest of:

the date you receive the goods;
the date you enter the payment in your books or the date it is debited from your bank account, whichever is earlier;
the date immediately after 30 days from the date of the supplier's invoice.

For services, the time of supply is the earliest of:

the date you enter the payment in your books or the date it is debited from your bank account, whichever is earlier;
the date immediately after 60 days from the date of the supplier's invoice.

If none of these dates can be worked out, the time of supply is the date you enter the transaction in your books of account. Read more in what is reverse charge mechanism under GST.

Interest, late fee or penalty for delayed payment

If your customer pays you interest, a late fee or a penalty for paying late, that amount is added to the value of the supply. Its time of supply is the date you receive that additional amount, not the date of the original invoice.

When the GST rate changes (Section 14)

Rate changes are when time of supply matters most. When the GST 2.0 rates took effect on 22 September 2025, many businesses had invoices and payments on both sides of that date.

For a supply completed before the rate change:

Invoice issued before the change?	Payment received before the change?	Time of supply	Rate
No	No	Earlier of invoice date or payment date	New rate
Yes	No	Date of invoice	Old rate
No	Yes	Date of payment	Old rate

Supplies made after a rate change follow their own combinations in Section 14. Two extra points:

In a rate-change case, the date of receipt of payment is the date of bank credit if the credit comes more than four working days after the date of change.
Suppliers of goods (other than composition taxpayers) still pay tax at the time of invoice under Notification No. 66/2017-Central Tax, even in a rate change.

Worked examples for small businesses

All examples assume an 18% GST item or service and a regular (non-composition) supplier registered in Maharashtra.

Goods, invoice before payment. A Pune distributor delivers stock and issues the invoice on 28 March. The buyer pays on 10 April. The time of supply is 28 March, so the sale belongs to the March tax period even though the money came in April.
Goods, advance first. A furniture shop takes an advance of ₹20,000 on 5 March and delivers with an invoice on 20 March. Under Notification No. 66/2017, there is no GST on the advance. Tax on the full value is payable with the invoice dated 20 March.
Services, advance first. A design consultant receives an advance of ₹50,000 on 25 June for work to be done in July, and invoices on 5 July. For the ₹50,000, the time of supply is 25 June, so GST on the advance belongs to June. The balance is taxed on the 5 July invoice.
Services, invoice issued late. A repair firm finishes a job on 1 August but issues the invoice only on 15 September, after the 30-day limit. The customer pays on 20 September. Because the invoice was late, the time of supply is the earlier of the date of service (1 August) and the payment date. The tax belongs to August, not September.
Reverse charge on a service. You receive a supplier's invoice dated 1 May for a service on which you pay tax under reverse charge, and you pay on 10 June. The 60-day date would fall in July, so the earliest date is your payment on 10 June.

Common time of supply mistakes

Treating the payment date as the tax date for goods. For regular suppliers of goods, the invoice date normally decides it.
Ignoring GST on service advances. A service advance can belong to an earlier tax period than the invoice.
Issuing service invoices late. After the 30-day limit, the date of service decides the time of supply, and the sale can fall into an earlier period than you reported.
Back-dating or post-dating invoices around a rate change. The rate follows the time of supply rules in Section 14, not the date you prefer.
Missing the 30/60-day dates on reverse charge purchases. Unpaid supplier invoices can still create tax liability for you.

How billing software helps

Most time of supply errors start with dates: an invoice raised late, or a sale entered in the wrong month. When every GST invoice is raised at the time of sale, with the right date, tax split and amount, your tax periods stay clean and your returns match your books.

Billoxy is GST billing and invoicing software for Indian MSMEs, on web and mobile. You raise GST invoices as you sell, with the invoice date and the CGST + SGST or IGST split on each bill. Your CA still reviews advances, reverse charge and rate-change cases. To check when an invoice is due in the first place, see when should a GST invoice be issued?

Related Billoxy guides

Official sources

FAQs

What is the time of supply in simple words?

It is the date on which GST becomes payable on a supply. That date decides which tax period, and which return, the supply belongs to.

Is GST payable on advance received for goods?

Not for regular registered suppliers. Under Notification No. 66/2017-Central Tax, suppliers of goods other than composition taxpayers pay GST when the invoice is issued, not when the advance is received.

Is GST payable on advance received for services?

Yes. For services, the time of supply is the earlier of the invoice date and the payment date, so an advance received before the invoice is taxed when it is received.

What is the difference between time of supply and place of supply?

Time of supply decides when GST is payable. Place of supply decides where the supply is made, and so whether you charge CGST + SGST or IGST. Every taxable sale needs both.

Which rate applies if the GST rate changes between the invoice and the payment?

It depends on whether the supply was completed before or after the change, and on which of the invoice and the payment came first. Section 14 of the CGST Act sets the combinations, as in the table above.

What to do next

Need one GST invoice dated correctly right now? Use the free GST invoice generator. For everyday GST billing, invoicing and inventory for Indian MSMEs, start with Billoxy (10-day trial).

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