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Microlesson · 5-min read

Section 13 – Time of Supply of Services (Forward Charge, Reverse Charge, Vouchers, Residual, Interest)

# Section 13 – Time of Supply of Services

## Sec 13(1) – Charging Rule

Liability to pay tax on services arises at the time of supply as determined under this section.

## Sec 13(2) – Forward Charge

### Case A – Invoice issued within time prescribed under Sec 31

ToS = Earlier of:

  • Date of issue of invoice, OR
  • Date of receipt of payment (to the extent it covers the supply).

### Case B – Invoice NOT issued within time prescribed under Sec 31

ToS = Earlier of:

  • Date of provision of service, OR
  • Date of receipt of payment.

### Case C – Fallback

If neither (A) nor (B) applies → date on which recipient shows receipt of service in his books.

### "Date of receipt of payment" (Explanation)

Earlier of:

  • Date payment is recorded in supplier's books, OR
  • Date payment is credited to supplier's bank account.

### Time limit for invoice under Sec 31 (Services)

SituationTime Limit
Normal servicesWithin 30 days from date of supply of service
Insurance, Banking, FIs (incl. NBFCs)Within 45 days from date of supply
Insurance / Banking / FI / NBFC / Telecom / notified suppliers — supplies between distinct persons (Sec 25)Before/at recording in books OR before expiry of quarter during which supply was made (2nd proviso to Rule 47)
Continuous supply of service(i) On/before due date of payment (if ascertainable from contract); (ii) Before/at receipt of payment (if due date not known); (iii) On/before completion of milestone event (if linked to event) [Sec 31(5)]
Cessation of service before completionAt the time supply ceases, covering supply made till then

Continuous supply of services = services provided continuously/recurrently under a contract > 3 months with periodic payment obligations.

### Excess Payment ≤ ₹1,000 (Proviso)

Unlike goods, this IS relevant for services. Supplier may treat invoice date as ToS for the excess (up to ₹1,000). Useful for telephone, electricity, periodical bills.

## Sec 13(3) – Reverse Charge on Services

ToS = Earlier of:

(a) Date of payment, OR

(b) Date immediately following 60 days from date of invoice by supplier (where supplier issues invoice), OR

(c) Date of issue of invoice by recipient (where recipient is required to issue invoice).

Fallback: Date of entry in recipient's books.

### "Date of payment" under RCM

Earlier of:

  • Date payment is recorded in recipient's books, OR
  • Date payment is debited from recipient's bank account.

### Recipient's invoice [Sec 31(3)(f) + Rule 47A]

Recipient must issue invoice within 30 days from date of receipt of supply (for RCM services where recipient invoices).

### Import of Services between Associated Enterprises

When service is received from an associated enterprise located outside India, ToS = Earlier of:

  • Date of payment, OR
  • Date of entry of service in recipient's books.

## Sec 13(4) – Vouchers Exchangeable for Services

  • If supply is identifiable at issue → date of issue of voucher.
  • Else → date of redemption.

## Sec 13(5) – Residual

  • Due date of filing periodical return, OR
  • In any other case, date on which GST is paid.

## Sec 13(6) – Interest / Late Fee / Penalty for Delayed Payment

Same as goods — ToS = date supplier receives such additional value.

Worked example

### Example 1

Forward charge, invoice in time: Service completed 5-Jun; invoice issued 20-Jun (within 30 days); payment received 25-Jun. ToS = 20-Jun (earlier of invoice date and payment date).

### Example 2

Forward charge, invoice delayed: Service completed 5-Jun; invoice issued 10-Jul (beyond 30 days); payment received 25-Jun. ToS = earlier of date of provision (5-Jun) or date of receipt of payment (25-Jun) = 5-Jun.

### Example 3

Reverse charge: Service received 1-May; supplier's invoice date 1-May; recipient pays 15-Jun; 61st day from invoice = 1-Jul. ToS = earlier of 15-Jun (payment) or 1-Jul (60 days + 1) = 15-Jun.

### Example 4

Associated enterprise (import): Indian co. receives consultancy from US parent. Service entered in books 1-Apr; payment debited from bank 1-Jun. ToS = 1-Apr (earlier of payment or entry in books).

### Example 5

Voucher (services, non-identifiable): Spa gift voucher worth ₹2,000 sold to a customer; specific service not chosen. ToS = date of redemption.

⚠️ Common exam mistakes

  • Using the 30-day rule for invoices issued by Insurance / Banking / FIs / NBFCs — they get 45 days.
  • Using the 30-day RCM clock for services — for services under RCM, it is 60 days (Sec 13(3)(b)), unlike goods where it is 30 days.
  • Forgetting the special associated-enterprise rule for import of services — it bypasses the 60-day RCM rule.
  • Treating the ₹1,000 excess payment proviso as irrelevant for services — it IS relevant for services (unlike goods, where Notification 66/2017 made it moot).
  • Confusing continuous supply of services rules — invoice timing depends on whether due date is ascertainable, payment-linked, or event-linked.
  • Missing the fallback rule — if dates cannot be determined, ToS = date recipient records receipt of service in books.
Reference: Section 13 — CGST Act, 2017
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