Decoding GST: A Detailed Guide to Time, Place, and Value of Supply

The Goods and Services Tax (GST) regime in India has revolutionized the indirect tax system, bringing about uniformity and streamlining taxation across the country. At the heart of GST lies the crucial understanding of three fundamental pillars: Time of Supply, Place of Supply, and Value of Supply. These concepts are indispensable for determining when the tax liability arises, where the supply is deemed to have taken place, and on what amount the tax is to be calculated. Accurate determination of these three elements is not just a matter of compliance; it directly impacts a business’s tax obligations, input tax credit eligibility, and overall financial health.

Understanding the Time of Supply under GST

The Time of Supply (TOS) under GST signifies the point in time when the liability to pay tax arises. Determining the correct TOS is crucial as it dictates the tax period in which the supply needs to be reported and the tax needs to be paid. The rules for determining the TOS differ for goods and services.

Time of Supply for Goods:
The Time of Supply for goods is the earliest of the following dates:

• Date of issue of invoice: When the supplier issues an invoice for the goods.
• Last date by which the invoice should have been issued: As per the GST rules, there is a prescribed time limit for issuing invoices for goods.
• Date of receipt of payment by the supplier: When the supplier receives payment for the goods.

Example 1: Time of Supply for Goods (Forward Charge)
ABC Traders sold goods to XYZ Retailers. The invoice was issued on March 10, 2025. The goods were dispatched on March 12, 2025, and payment was received on March 15, 2025. The last date for issuing the invoice was March 12, 2025 (assuming the goods were removed on that date). In this case, the Time of Supply is March 10, 2025, as it is the earliest of the invoice date, the last date for issuing the invoice, and the date of receipt of payment.

Example 2: Time of Supply for Goods (Reverse Charge)
PQR Manufacturers purchased raw materials from an unregistered dealer. They received the goods on April 5, 2025, and made the payment on April 10, 2025. The Time of Supply under the Reverse Charge Mechanism (RCM) for goods is the earliest of the date of receipt of goods, the date of payment, or the date immediately following 30 days from the invoice date. Therefore, the Time of Supply is April 5, 2025.

Time of Supply for Services:
The Time of Supply for services is generally the earliest of the following dates:

• Date of issue of invoice: When the supplier issues an invoice for the services.
• Date of receipt of payment: When the supplier receives payment for the services.

However, if the invoice is issued within the prescribed period (30 days from the date of supply of service), the Time of Supply is the earlier of the invoice date or the payment receipt date. If the invoice is not issued within the prescribed period, the Time of Supply is the date of completion of the service or the payment receipt date, whichever is earlier.

Example 3: Time of Supply for Services (Invoice Issued Timely)
LMN Consultants provided consulting services to DEF Corp. The services were completed on May 1, 2025. The invoice was issued on May 15, 2025, and payment was received on May 20, 2025. Since the invoice was issued within 30 days of service completion, the Time of Supply is May 15, 2025.

Example 4: Time of Supply for Services (Invoice Not Issued Timely)
GHI Technologies provided software development services to JKL Enterprises. The services were completed on June 10, 2025, but the invoice was issued on July 15, 2025 and payment received on July 20, 2025. Here, the Time of Supply is June 10, 2025.

Time of Supply under Reverse Charge for Services:
For services under reverse charge, the Time of Supply is the earliest of:

• The date of payment made by the recipient, or
• The date immediately after 61 days from the date of invoice.

Example 5: Time of Supply for Services (RCM)
RST & Associates received legal services on August 1, 2025. The invoice was issued on July 15, 2025, and payment was made on August 10, 2025. Therefore, the Time of Supply is August 10, 2025.

Understanding the Place of Supply under GST

The Place of Supply (PoS) determines where the supply of goods or services is deemed to have taken place. This classification is crucial for deciding whether a supply is intra‑state (attracting CGST and SGST) or inter‑state (attracting IGST).

For Goods:
– If goods are moved, the PoS is the destination where the movement terminates.
– If there is no movement, the PoS is the location of the goods at the time of supply.

Example 6: Place of Supply for Goods (Movement Involved)
A manufacturer in Haryana ships goods to a dealer in Maharashtra. The PoS is Maharashtra, attracting IGST.

Example 7: Place of Supply for Goods (No Movement)
A furniture retailer in Delhi sells items already installed in its showroom. The PoS is Delhi, attracting CGST and SGST.

For Services:
Generally, if the recipient is registered, the PoS is the recipient’s location; if unregistered, the PoS is where the service is performed, or, if not available, the supplier’s location.

Example 8: Place of Supply for Services (Registered Recipient)
A company in Bangalore hires a marketing agency in Mumbai. The PoS is Bangalore.

Example 9: Place of Supply for Services (Unregistered Recipient – Service Performed Locally)
An individual in Kolkata hires a plumber locally. The PoS is Kolkata.

Example 10: Place of Supply for Services (Unregistered Recipient – Service Performed Remotely)
An individual in Jaipur subscribes to an online course provided by a Delhi-based company. The PoS is Jaipur.

Determining the Value of Supply under GST

The Value of Supply is the consideration (price) paid or payable for the goods or services. It forms the taxable base for calculating GST. This includes all charges such as incidental expenses, commissions, and packing charges, but excludes discounts given before or at the time of supply.

Example 11: Value of Supply (Inclusions)
A product is sold for ₹10,000. With additional charges of ₹500 (packing) and ₹200 (transportation), the total value is ₹10,700. GST is calculated on ₹10,700.

Example 12: Value of Supply (Discount)
Goods listed at ₹15,000 with a 10% trade discount result in a value of ₹13,500. GST is calculated on ₹13,500.

In specific cases where the transaction value is not straightforward (e.g., related party transactions or barter), valuation rules such as cost-plus 10% markup may apply.

The Interplay and Importance of Time Place and Value of Supply

The Time of Supply dictates when the tax obligation arises, the Place of Supply determines the tax jurisdiction (intra‑state vs. inter‑state), and the Value of Supply forms the base for calculating the GST amount. Accurate determination of these elements is critical to:

• Ensure correct tax payment and timely collection.
• Accurately claim Input Tax Credit (ITC).
• Comply with GST regulations and filing requirements.
• Avoid potential disputes with tax authorities.

Conclusion

A thorough understanding of the Time Place and Value of Supply is fundamental for navigating the complexities of the GST regime. By correctly identifying these three crucial elements for every transaction, businesses can ensure compliance, optimize their tax positions, and maintain an efficient GST system. Continuous learning and staying updated with the latest GST notifications and amendments are essential for effective tax management.