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Published on 11 April 2025

Understanding the Time of Supply for Goods Under GST

Understanding Time of Supply of Goods

Time of supply refers to the moment when a taxpayer becomes liable to pay tax on goods, as defined by the relevant provisions of law.

Forward Charge: Time of Supply

The time of supply occurs at the earliest of the following:

  • The date of invoice issuance, or the last date by which the invoice must be issued in accordance with Section 31 of the CGST Act.
  • Situations outlined in Section 31 include:
    • Supply involving the movement of goods
    • Supply not involving the movement of goods

Invoice Dates

  1. Invoice Issued Before Movement: If an invoice is issued prior to the actual movement or removal of goods, the date on which the invoice is issued is considered the time of supply.

  2. Supply Involving Movement: If the supply involves the transportation of goods, the invoice must be generated at the exact moment the goods are being dispatched.

Supply Without Movement

In cases where goods are not in motion, the time of supply is recognized as the moment the goods are delivered or made available to the recipient.

Continuous Supply of Goods

Continuous supply of goods refers to shipments provided repeatedly over time, where the supplier invoices the buyer on a regular or periodic basis.

Examples of Continuous Supply

  • Supply of lubricating oil through a pipeline.
  • Supply of 20 coffee cups daily to an office.

The invoice must be issued either before or at the time each statement is prepared or when each payment is received, where "payment" refers to the terms of the agreement rather than any unsolicited advances.

Approval for Sale or Return Basis

For goods sent or received on an approval for sale or return basis, the time of supply is determined by the earliest of either the date of the invoice issuance or the due date for invoice issuance. This due date is defined as either the confirmation of the supply or six months from the removal date.

Reverse Charge: Time of Supply

When tax is owed on a reverse charge basis, the time of supply occurs at the earlier of:

  • The date goods are received
  • The date payment is made
  • 30 days from the date of the invoice issued by the supplier

Conclusion

This overview clarifies the essential aspects of the time of supply of goods under the GST framework.

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