Time of Supply of Goods under GST – Explained

Time of supply is a crucial measure under GST as it determines the specific point in time when goods are deemed to be supplied and, consequently, when the taxpayer becomes liable to pay tax. This article focuses on the time of supply for goods under GST. (For services, please refer to our separate article on the time of supply for services.)

Time of Supply Under Normal Charge

Under normal conditions, the time of supply for goods is determined as the earlier of the following two dates:

• Date of Invoice: The date on which the invoice is issued (or the last day by which it should have been issued). For goods in movement, the invoice must be issued at the time of removal; otherwise, at the time of delivery.
• Date of Receipt of Payment: The date on which the payment is received, considering the earlier of when the payment is recorded in the books or credited to the bank account.

Illustration:
Date of Invoice: 15th May 2024
Date of Receipt of Payment: 10th July 2024 (Recorded on 11th July 2024)
Time of Supply: 15th May 2024

Time of Supply Under Reverse Charge

Under the reverse charge mechanism, the liability to pay tax rests with the recipient. The time of supply is determined as the earliest of:

• Date of Receipt of Goods
• Date of Payment: The earlier of the date the recipient records the payment in their books or the date the payment is debited from their bank account.
• Date Immediately After 30 Days from the Invoice Date (60 days for services)

Illustration:
Date of Receipt of Goods: 15th May 2024
Date of Payment: 15th July 2024
Date of Invoice: 1st June 2024
Date Recorded in Books of Recipient: 18th May 2024
Time of Supply: 15th May 2024
If none of these dates are determinable, the time of supply defaults to the date of entry in the recipient’s books (e.g., 18th May 2024).

Time of Supply for Vouchers

For the supply of vouchers, the time of supply is determined as follows:

• If the supply can be identified at the time of issuance, the time of supply is the date of issuance of the voucher.
• Otherwise, it is the date of redemption of the voucher.

When Time of Supply Cannot Be Determined

If the time of supply cannot be determined using the above provisions, then:

• It will be the date on which a periodical return is due, OR
• The date on which the tax is paid, in any other case.

Additional Note on Vouchers

For vouchers, if the time of supply cannot be determined by issuance or redemption, it will be taken as the date of payment.

Conclusion

In the GST regime, determining the correct time of supply for goods is essential to ensure timely tax collection and accurate return filing. With multiple triggering events—be it invoice issuance, receipt of payment, or the date of goods receipt—businesses must reconcile their financial records with GST returns carefully. For further assistance or queries regarding GST compliance, please feel free to contact DisyTax. We’re here to help you navigate GST complexities with clarity and confidence.