Time of Supply —
Services
Section 13, CGST Act
When does GST liability arise for services? Section 13 lays down rules for Forward Charge, Reverse Charge, Import of Services, 60 Day Rule, Associated Enterprise, Vouchers, Residuary Provision, and Late Payment Penalty — all through the Rahul & Simran story.
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What is Time of Supply for Services?
While Day 7 covered Time of Supply for Goods (Sec 12), Day 8 dives into Time of Supply for Services under Section 13 of the CGST Act, 2017. Services are intangible — there is no physical delivery or removal. So the law uses invoice dates, payment dates, and special rules to pin down the exact moment GST liability arises.
📖 Day 8 Story — Rahul & Simran
- Service Contract: 1st July — Simran hires Rahul
- Scope: Revamp website for ₹50,000
- Agreed completion: 10th July
- This story is used to illustrate ALL Time of Supply rules under Sec 13.
Sec 13(2) — Forward Charge
Forward Charge — W.E.E (Whichever is Earlier)
💡 Excess Payment — Proviso to Sec 13(2)
- Simran pays ₹51,000 (extra ₹1,000 over agreed ₹50,000)
- Rahul can pay GST on the extra ₹1,000 and issue invoice later
- This is a special proviso — excess payment received can be treated separately
Sec 13(3) — Reverse Charge — Import of Services
Reverse Charge — Import of Services / Unregistered Supplier
Simran (Owner She Style) imports a service from Tom in USA. Since Tom is a foreign entity, Simran must pay GST under Reverse Charge Mechanism (RCM) as per Sec 13(3). TOS = W.E.E of the following:
TOS = 10th Sept — Entry in Books is earliest of B & C; compare with A (1st Aug) → 10th Sept wins as earliest of all
Sec 13(3)(c) — Self-Invoicing
Self-Invoicing — Import of Service / Unregistered Person
When a service is imported or received from an unregistered person, the recipient issues a self-invoice (instead of receiving one from the supplier).
TOS = Date of Issue of Self-Invoice (D.O.I.O.S.I.)
The 60 Day Rule — RCM
60 Day Rule — When Payment is Delayed Under RCM
Under RCM, if Simran delays payment to Tom beyond 60 days from invoice date, GST liability still arises at the 60-day mark — whether or not payment is actually made.
📅 Calculation
- Invoice date: 1st Aug
- 1st Aug + 60 days = 30th Sept
- If Simran has NOT paid by 30th Sept → TOS = 30th Sept
- This prevents taxpayers from indefinitely deferring GST by not paying
TOS = 30th September (Invoice Date 1 Aug + 60 days, if not paid by then)
Associated Enterprise — Outside India
Associated Enterprise — Overseas Related Party
When a service is received from an associated enterprise located outside India, TOS is the earliest of entry in the recipient’s books or actual payment.
TOS = 3rd September — Entry in Books is W.E.E (earlier than payment on 5th Sept)
Sec 13(4) — Supply via Vouchers
Vouchers — Services
Simran receives vouchers. TOS depends on whether the service is identifiable at time of issue:
Get Website Review Service
Voucher redeemable only for a specific service — identifiable at time of issue.
📅 Issue Date: 1st Oct
Any Service Voucher
Voucher usable for any service — cannot identify supply at issue time.
📅 Redemption Date: 20th Oct
Sec 13(5) — Kuch Nahi — Residuary Provision
Residuary — When Nothing Else Works
When none of the above rules can determine TOS — Rahul has not raised invoice, Simran has not paid, and nothing is recorded in books — the Residuary Provision kicks in:
Sec 13(6) — Late Payment Penalty
Interest / Late Fees / Penalty on Delayed Payment
When Simran pays a late payment penalty to Rahul, GST is also due on that penalty. TOS = the date on which Rahul actually receives the late amount (not when it was due).
TOS = 30th September — Date Rahul received the late fee (₹2,000)
Complete TOS Scenarios Table — Quick Reference
All 11 scenarios from the reference table in one place:
| # | Scenario | Key Date / Outcome | Time of Supply |
|---|---|---|---|
| 1 | Invoice issued on time | 15th July (Invoicee) | 15th July (Earlier) |
| 2 | Invoice issued late | 25th Aug (Late Invoice) | 10th July |
| 3 | Extra ₹1,000 paid (Excess) | 20 July | Optionally: Later invoice date |
| 4 | Reverse Charge – Invoice 1 Aug, No Payment | 1st Aug, No payment | 10th Sept |
| 5 | Reverse Charge – 60 Days rule | 1st Aug + 60 days | 30th Sept |
| 6 | Recipient issues self-invoice | 5th Sept | 5th Sept |
| 7 | Associated enterprise (foreign) — Books: 3rd, Payment: 5th | Books: 3rd Sept | 3rd Sept |
| 8 | Voucher – Identifiable service | Issue date: 1st Oct | 1st Oct |
| 9 | Voucher – Not identifiable | Redeemed: 20th Oct | 20th Oct |
| 10 | No invoice / payment / date available | Monthly return due: 20 Aug | 20th Aug |
| 11 | Late Fee ₹2,000 received | Received: 30 Sept | 30 Sept |
🧠 The Golden Rule of Sec 13 — W.E.E
- For Forward Charge (13(2)): TOS = W.E.E of Invoice date vs Payment date
- For RCM (13(3)): TOS = W.E.E of Invoice date, Books entry, Actual payment — PLUS 60 Day Rule
- For Associated Enterprise: TOS = W.E.E of Books entry vs Payment
- “W.E.E” = Whichever is Earlier — the single most important concept in TOS for services
- Residuary (13(5)) is the last resort — only when all other rules fail to determine TOS
