Time of Supply for Goods/Services (Point of Tax) for Both Forward and Reverse Charge When Consideration is Received in Money and When Consideration Other than Money

Time of Supply refers to the point in time when goods or services are deemed to have been supplied under GST. It determines the date on which GST liability arises and the applicable tax rate. The provisions differ for forward charge and reverse charge mechanisms and also vary depending on whether consideration is received in money or in a form other than money.

Part I: Time of Supply of Goods under Forward Charge (Consideration Received in Money)

1. Date of Issue of Invoice

When the invoice is issued within the prescribed period, the time of supply is the earlier of the date of issue of invoice or the date of receipt of payment. This ensures timely tax collection and determines the point at which GST becomes payable.

Example: Goods supplied on 10 July, invoice issued on 12 July, payment received on 20 July.
Time of Supply: 12 July (earlier event).

2. Date of Receipt of Payment

If payment is received before the invoice is issued, the date of payment becomes the time of supply. GST liability arises immediately upon receipt of consideration.

Example: Advance of ₹50,000 received on 5 July and invoice issued on 15 July.
Time of Supply: 5 July.

3. Invoice Not Issued Within Prescribed Time

If the invoice is not issued within the prescribed period, the time of supply is the earlier of the date of supply or date of receipt of payment.

Example: Goods supplied on 10 July, invoice issued on 25 July, payment received on 15 July.
Time of Supply: 15 July.

Part II: Time of Supply of Goods under Reverse Charge (Consideration Received in Money)

1. Date of Receipt of Goods

Under reverse charge, GST is payable by the recipient. The first determining factor is the date on which goods are received.

Example: Goods received on 5 August.
This date is considered while determining the time of supply.

2. Date of Payment

The date on which payment is entered in the recipient’s books or debited from the bank account is also considered.

Example: Payment recorded on 10 August and debited by bank on 12 August.
Date of payment = 10 August.

3. 30 Days from Supplier’s Invoice Date

If neither of the above determines the liability, 30 days from the supplier’s invoice date is considered.

Example: Invoice dated 1 August.
Thirty days expire on 31 August.

4. Earliest of the Above Dates

The earliest among the above dates becomes the time of supply.

Example:
Goods received: 5 August
Payment: 10 August
30 days from invoice: 31 August

Time of Supply: 5 August.

Part III: Time of Supply of Services under Forward Charge (Consideration Received in Money)

1. Invoice Issued Within Prescribed Period

When an invoice is issued within the prescribed period, the time of supply is the earlier of the invoice date or payment receipt date.

Example: Service completed on 10 June, invoice issued on 15 June, payment received on 25 June.
Time of Supply: 15 June.

2. Payment Received Before Invoice

If payment is received before invoice issuance, GST liability arises on the date of payment.

Example: Advance received on 5 June, invoice issued on 15 June.
Time of Supply: 5 June.

3. Invoice Not Issued Within Prescribed Period

If the invoice is not issued within the prescribed period, the earlier of service completion date or payment receipt date becomes the time of supply.

Example: Service completed on 10 June, payment received on 12 June, invoice issued on 25 June.
Time of Supply: 10 June.

Part IV: Time of Supply of Services under Reverse Charge (Consideration Received in Money)

1. Date of Payment

Under reverse charge, the recipient’s payment date is a major factor in determining the time of supply.

Example: Payment recorded on 8 September.
This date is considered for GST liability.

2. 60 Days from Invoice Date

If payment is not made immediately, 60 days from the supplier’s invoice date is considered.

Example: Invoice issued on 1 September.
60 days expire on 31 October.

3. Earlier of Payment Date or 60 Days

The earlier of these two dates becomes the time of supply.

Example:
Payment Date: 8 September
60th Day from Invoice: 31 October

Time of Supply: 8 September.

Part V: Time of Supply of Goods When Consideration is Received Other Than Money

1. Open Market Value Method

When consideration is wholly or partly not in money, the value and time of supply are determined based on the open market value of the goods supplied.

Example: A dealer exchanges a new refrigerator for an old refrigerator plus ₹10,000. The open market value of the new refrigerator is ₹35,000. GST is payable based on the determined value and the applicable time of supply provisions.

2. Monetary Equivalent Method

If open market value is unavailable, the monetary equivalent of consideration received is used.

Example: Goods exchanged for another product worth ₹20,000 plus cash of ₹5,000.
Total value = ₹25,000.

The time of supply remains linked to invoice issuance or payment events under forward charge provisions.

Part VI: Time of Supply of Services When Consideration is Received Other Than Money

1. Service Supplied Against Barter Arrangement

When services are exchanged for goods or other services, the transaction is valued according to GST valuation rules. Time of supply follows the normal provisions relating to invoice issuance and receipt of consideration.

Example: A marketing agency provides advertising services in exchange for office furniture. The value of the furniture is used to determine taxable value.

2. Open Market Value of Services

If services are exchanged without monetary payment, the open market value of the services becomes relevant for determining taxable value.

Example: A consultant provides professional advice in exchange for website development services. If consultancy services normally cost ₹50,000, GST is calculated on ₹50,000.

The time of supply will generally be the earlier of invoice issuance or recognition of consideration.

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