Time of Supply
Goods
When exactly does GST become payable? Time of Supply pins the exact moment tax liability arises — covering Forward Charge, Reverse Charge, Vouchers, Residuary provisions, Interest on delayed payments, and key Notifications.
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What is Time of Supply?
Time of Supply (TOS) determines the exact point in time when GST liability arises — i.e., when the taxpayer must account for and pay GST. It is critical because it decides which tax period the liability falls in and affects due dates for filing returns and making payments.
For goods, Sections 12(2) to 12(6) of the CGST Act, 2017 lay down the rules for different scenarios — forward charge, reverse charge, vouchers, residuary cases, and interest on delayed payments.
Sec 12(2) — Forward Charge — Supply of Goods
Forward Charge — Normal Supply of Goods
📌 Key Rules — Sec 31 (When to Issue Invoice)
- Supply with movement of goods → Invoice at the time of removal
- Supply without movement → Invoice at time of delivery / when made available
- Advance payments are NOT taxed for goods (as per Notification) ✱
Sec 12(3) — Reverse Charge — Supply of Goods
Reverse Charge — Recipient Pays GST
Sec 12(4) — Supply via Vouchers
Voucher-Based Supply
The TOS for voucher-based supply depends on whether the underlying supply (goods/service) can be identified at the time the voucher is issued.
Supply is Identifiable at Issue
The voucher is redeemable only for specific goods/services. The supply can be pinpointed at the time of issuance.
🛒 Example: Flipkart Voucher redeemable only for Electronics
Supply NOT Identifiable at Issue
The voucher is usable for any goods/services — the exact supply cannot be determined at issuance.
🎁 Example: Amazon Gift Card usable for all products
Sec 12(5) — Residuary Provision
Residuary / Catch-All Provision
When the Time of Supply cannot be determined under Sec 12(2), (3) or (4), the Residuary Provision kicks in — it is the fallback rule.
Sec 12(6) — Interest, Late Fees & Penalty
Interest / Late Fees / Penalty on Delayed Payment
When a supplier charges interest, late fees, or penalty for delayed payment by the recipient, GST is also applicable on such charges. The TOS is the date on which the supplier actually receives the amount (not when it falls due).
⚠️ Important Note
TOS arises on the date the supplier actually receives the overdue amount — not when it was contractually due. The ₹500 late fee also attracts GST, computed at the applicable rate.
Key Notifications — Advance Tax on Goods
Three important notifications have shaped how advance payments for supply of goods are treated under GST. The timeline of these notifications is crucial for exams and practice.
| Period | Notification | Imputation / Effect |
|---|---|---|
| 13.10.2017 – 14.11.2017 | N/N 40/2017-CT | Small Suppliers (Turnover ≤ ₹1.5 Cr) — not liable to pay GST on advance received. Tax applicable only on delivery of goods. |
| 15.11.2017 – 30.09.2023 | N/N 66/2017-CT | Extended benefit to ALL Suppliers of Goods (irrespective of turnover). No GST on advance — pay tax only on delivery / invoice issuance. |
| From 01.10.2023 | N/N 50/2023-CT | GST applicable on specified actionable claims — e.g., Lottery, Betting, Gambling, Horse Racing. These are now treated as supply and taxed accordingly. |
🧠 The Big Takeaway on Advance for Goods
- From 15.11.2017 to 30.09.2023 — No GST on advance for goods. Tax arises only when goods are actually supplied (invoice issued / delivery made).
- This exemption applies to all goods suppliers — small and large alike.
- The note’s “★ Advance not taxed” remark refers to this notification-based exemption.
- From 01.10.2023 — N/N 50/2023-CT brings actionable claims like lottery and betting into the GST net as a separate category.
