Time of Supply of Goods – Forward Charge [Section 12]
## Time of Supply of Goods – Forward Charge [Section 12 of CGST Act]
The Time of Supply (TOS) determines when GST liability arises. Under forward charge, the supplier collects and deposits tax.
### Rule – Earlier of:
TOS of Goods (Forward Charge) = Earlier of:
1. Date of issue of invoice by the supplier, OR
2. Last date on which invoice should have been issued under Section 31 (i.e., date of removal/delivery as applicable)
Note: With effect from amendment (Notification 66/2017-CT), the receipt of advance for supply of goods is not a trigger for time of supply for goods (other than composition dealers) – TOS is only when invoice is issued/required to be issued.
### Practical Flow
1. Identify date of invoice actually issued.
2. Identify the latest date by which invoice should have been issued (per Section 31 – removal or delivery date).
3. TOS = Earlier of the two.
### Why This Matters
Drives the month/return period in which output tax must be paid.
Late invoicing does NOT delay tax liability – the 'should have been issued' date kicks in.
Worked example
### Example 1
Example 1: Goods removed on 5 Aug; Invoice issued on 5 Aug.
Invoice date = 5 Aug; Last date for invoice = 5 Aug.
TOS = 5 Aug
### Example 2
Example 2: Goods removed on 5 Aug; Invoice issued on 10 Aug.
Last date for invoice = 5 Aug (date of removal); actual invoice = 10 Aug.
TOS = Earlier of (10 Aug, 5 Aug) = 5 Aug.
Tax liability arises in August even though invoice was late.
### Example 3
Example 3: Goods removed on 28 Aug; Invoice issued on 25 Aug (advance invoice).
Last date for invoice = 28 Aug; actual invoice = 25 Aug.
TOS = 25 Aug (earlier).
### Example 4
Example 4 (Continuous supply): Monthly billing date is 30th. Invoice for August is issued on 30 Aug.
Last date = 30 Aug; Actual = 30 Aug.
TOS = 30 Aug
⚠️ Common exam mistakes
Treating advance receipt as TOS for goods – it's not; advance triggers TOS only for services.
Using only the actual invoice date – missing the 'should have been issued' check.
Forgetting that under continuous supply, the relevant Section 31 due date is the statement/payment date.
Confusing TOS with due date for filing returns – TOS only determines the period in which output liability arises.
Bare-Act text Section 12(2) · CGST Act, 2017 · click to expand
Section 12(2) of CGST Act, 2017 – The time of supply of goods shall be the earlier of the following dates, namely, – (a) the date of issue of invoice by the supplier or the last date on which he is required, under sub-section (1) of section 31, to issue the invoice with respect to the supply; or (b) the date on which the supplier receives the payment with respect to the supply. Provided that the supply shall be deemed to have been made to the extent it is covered by the invoice or, as the case may be, the payment.