Section 14 is a special override rule that replaces the normal time-of-supply rules (Sections 12 & 13) the moment the GST Council or the government changes a tax rate. Think of it like a train crossing a state border — the fare (GST rate) depends on which side of the border the train was officially 'on' when the taxable event crystallised. So the burning question becomes: does the old rate or the new rate apply? The answer hinges on three things: when the supply happened, when the invoice was raised, and when payment was received — all measured against the date of rate change.
Step 1 — Was the supply before or after the rate change? That's your starting point every time.
If supply was BEFORE the rate change: (a) Invoice before + Payment before → Earlier of the two dates (old rate). (b) Invoice before + Payment after → Invoice date controls (old rate). (c) Invoice after + Payment before → Payment date controls (old rate). (d) Invoice after + Payment after → Earlier of the two dates (new rate). The pattern: when invoice and payment straddle the rate-change date, the event that fell before the change locks in the old rate — the law protects transactions already in progress.
If supply was AFTER the rate change: (a) Invoice before + Payment before → Earlier of the two dates (old rate). (b) Invoice before + Payment after → Payment date controls (new rate). (c) Invoice after + Payment before → Invoice date controls (new rate). (d) Invoice after + Payment after → Earlier of the two dates (new rate). Here, when events straddle the change, the event after the change wins — since the supply itself is post-change, the new rate should logically apply.
Don't ignore the Proviso! If the bank credit happens more than 4 working days after the rate-change date, then for this section, the date of receipt of payment = date of credit in the bank account (not the books-of-account date). This can flip which rate applies entirely.
The Explanation defines 'date of receipt of payment' as the earlier of (date entered in supplier's books) or (date credited to the bank account) — subject to the proviso above.
This section is asked frequently as a 4–6 mark scenario question. Expect a table of events across the rate-change date and be asked to determine the correct time of supply and applicable rate.
Example 1 — Supply before rate change, invoice after, payment before
GST rate on IT consulting services changes from 18% to 12% effective 1st March 2025.
Ms. Iyer completes a project (supply) on 20th February 2025 (before rate change).
She issues the invoice on 10th March 2025 (after rate change).
She receives payment of ₹5,00,000 on 5th March 2025 (after rate change).
Identify the case: Supply before change. Invoice after. Payment after.
→ This is Case (a)(i) — both invoice and payment are after the rate change.
→ Time of supply = Earlier of invoice date (10th March) or payment date (5th March)
→ Time of supply = 5th March 2025
→ New rate (12%) applies.
GST = 12% × ₹5,00,000 = ₹60,000
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Example 2 — Supply after rate change, invoice before, payment after
GST rate on luxury goods changes from 18% to 28% effective 1st July 2025.
Rajesh & Co. Pvt. Ltd. supplies goods on 10th July 2025 (after rate change).
Invoice is raised on 25th June 2025 (before rate change).
Payment of ₹10,00,000 is received on 20th July 2025 (after rate change). Bank credits the amount on the same day — within 4 working days of rate change.
Identify the case: Supply after change. Invoice before. Payment after.
→ This is Case (b)(i) — invoice before, payment after, supply after change.
→ Time of supply = Date of receipt of payment = 20th July 2025
→ New rate (28%) applies.
GST = 28% × ₹10,00,000 = ₹2,80,000
📖 Bare Act text — Section 14, CGST Act 2017
(click to expand)
Notwithstanding anything contained in section 12 or section 13, the time of supply, where there is a change in the rate of tax in respect of goods or services or both, shall be determined in the following manner, namely:––
(a) in case the goods or services or both have been supplied before the change in rate of tax,––
(i) where the invoice for the same has been issued and the payment is also received after the change in rate of tax, the time of supply shall be the date of receipt of payment or the date of issue of invoice, whichever is earlier; or
(ii) where the invoice has been issued prior to the change in rate of tax but payment is received after the change in rate of tax, the time of supply shall be the date of issue of invoice; or
(iii) where the payment has been received before the change in rate of tax, but the invoice for the same is issued after the change in rate of tax, the time of supply shall be the date of receipt of payment;
(b) in case the goods or services or both have been supplied after the change in rate of tax,––
(i) where the payment is received after the change in rate of tax but the invoice has been issued prior to the change in rate of tax, the time of supply shall be the date of receipt of payment; or
(ii) where the invoice has been issued and payment is received before the change in rate of tax, the time of supply shall be the date of receipt of payment or date of issue of invoice, whichever is earlier; or
(iii) where the invoice has been issued after the change in rate of tax but the payment is received before the change in rate of tax, the time of supply shall be the date of issue of invoice:
Provided that the date of receipt of payment shall be the date of credit in the bank account if such credit in the bank account is after four working days from the date of change in the rate of tax.
Explanation.––For the purposes of this section, ―the date of receipt of payment‖ shall be the date on which the payment is entered in the books of account of the supplier or the date on which the payment is credited to his bank account, whichever is earlier.