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Section 12 – Time of Supply of goods

Meaning of Time of supply – Time of supply of goods means ‘’occasion when we are liable to pay tax on goods as per provisions of law ’’

♦ Time of supply – Forward Charge

Time of Supply will be earlier of

– Date of issue of Invoice or last date on which the Invoice is required to be issued with respect to that supply as per provisions of Section 31 of CGST ACT

– Two kinds of situations are stated in Section 31-

√ Supply involves movement of goods

√ In any other case

Date of Invoice- In case Invoice is issued before the actual movement of goods or removal of goods – Date of issue of Invoice shall be taken as the time of supply…

Supply Involves movement- In case supply involves movement of goods then Invoice must be issued at the exact time when the goods are about to be removed.


1. Mr P in Haryana gets an order from Mr Q on 18th November 2022 for supply of goods. Mr P despatches the goods from his premises to his transporter on 20th November 2022 but transporter initiates the transportation on 22nd November 2022.

So in above case the last date to issue the invoice will be 20th November 2022…

Take another one-

2. Mr P in Haryana gets an order from Mr Q on 18th November 2022 for supply of goods but Mr Q ‘s transporter takes delivery of the said goods on 19th November 2022 and delivers the same to Mr Q on 26th November 2022 …

The last date of Issue of Invoice will be 19th November 2022 as date of removal will be 19th November 2022…

3. Mr P in Haryana gets an order from Mr Q on 18th November 2022 for supply of goods but Mr P removes the goods from factory on 18th November 2022 to his depot but goods reached the depot on 19 th November 2022 from where Q’s transporter collects the goods on 20th November 2022 so the last date of issue of Invoice will be 19th November 2022 as transfer of goods from factory to depot is internal movement of goods.

♦  Supply does not involve movement– Time of supply will be when goods are delivered or made available to recipient.

Example –  Mr X agrees to sell his godown in Panipat to Mr Y on 22nd Nov 2022 along with Furniture with in godown and hands over the possession of godown and furniture on 25th Nov 2022. In this case, Furniture will be considered to be delivered on 25th Nov 2022 as per provisions of Section 31.

♦Continuous Supply of Goods- Continuous supply of Goods means supply of goods which is provided or agreed to be provided continuously or on recurrent basis and for which supplier invoices the recipient on regular or periodic basis.

♦ Eg- supply of lubricating oil through pipeline, supply of 20 coffee cups every day in an office. Invoice should be issued before or at the time each such statement is prepared or each such payment is received. Payment here means payment as per terms of an agreement and not any ad-hoc advance..

Goods sent or taken on approval for sale or return basis-

Time of supply should be earlier of the date of issuance of Invoice or last date of issuance of Invoice. The last date of issuance of Invoice will be earlier of the confirmation of supply or six months from the date of removal.

Time of supply – Reverse Charge

Where tax is payable on reverse charge basis-

Time of supply will be earlier of –

    • Date of receipt of goods
    • Date of payment
    • 30 days from issue of invoice by supplier

Example – Mr X, an agriculturist supplies raw-cotton to Mr Y (reverse charge applicable)—


01.11.2022 – Mr Y places an order for raw-cotton to Mr X.

10.11.2022- Mr Y receives the goods

15.11.2022- Mr X issues the invoice

20.11.2022 –Mr Y makes the payment by cheque.

25.11.2022 – Payment gets debited from Y‘s Bank account.

Time of supply shall be the earlier of following dates-

the date of receipt of goods -10.11.2022

the date of payment -20.11.2022 or 25.11.2022 – date when the payment gets debited in the books of the recipient whichever is earlier..

30 days from the date issue of invoice -16.12.2022

Time of supply will be -10.11.2022

Hope doubts of my readers has been cleared…..

Queries /doubts related to above mailed at

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April 2024