# Time of Supply for Goods [Section 12]

## Why does ToS matter?

GST is a transaction tax — but a transaction has many events (order, advance, invoice, dispatch, delivery, payment). The law needs ONE date to fix tax liability. That date is the Time of Supply (ToS).

## Forward Charge Mechanism (FCM)

ToS = Earlier of:

1. Date of issue of invoice, OR

2. Due date for issue of invoice (per Section 31).

> GST on advance for goods is NOT levied (Government notification). So date of receipt of payment is generally IGNORED for goods.

### Exception: Date of receipt of payment IS considered for:

Supply of goods in form of specified actionable claims (lottery, gambling, betting, horse racing, casinos).
Supply of goods by a composition supplier.

## Reverse Charge Mechanism (RCM)

ToS = Earliest of:

1. Date of receipt of goods, OR

2. Date of making payment [Note (ii)], OR

3. 31st day from date of invoice/other document.

If none can be determined → ToS = Date of entry in recipient's books.

## Definitions of Payment Dates

Term	Meaning
Date of receipt of payment (supplier-side)	Earlier of: date of entry in supplier's books OR date of credit in supplier's bank
Date of making payment (recipient-side)	Earlier of: date of entry in recipient's books OR date of debit from recipient's bank

## Residual Rule

If ToS cannot be determined by the above:

If periodical return filed → Due date of the return
Otherwise → Date of payment of GST

## Special Concession (FCM Advance)

If advance received exceeds invoice value by ≤ ₹1,000, the supplier may choose to treat Date of invoice as ToS for the excess (instead of date of receipt).

Worked example

### Example 1

Ex 1 – FCM, Goods Removed

A Ltd. dispatched machine on 10 Aug; payment received 5 Aug; invoice issued 17 Aug.

→ Due date of invoice = 10 Aug (date of removal).

→ ToS = Earlier of [Invoice 17 Aug / Due date 10 Aug] = 10 Aug (payment date ignored — goods FCM).

### Example 2

Ex 2 – FCM, Goods Made Available

B Ltd. kept goods ready on 2 Jun, informed customer same day; customer collected on 10 Jun; payment received 5 Jun; invoice on 12 Jun.

→ Due date of invoice = 10 Jun (when goods made available).

→ ToS = Earlier of [Invoice 12 Jun / Due date 10 Jun] = 10 Jun.

### Example 3

Ex 3 – RCM

D Ltd. sold to E Ltd. on RCM basis. Invoice 1 Jun; goods received 10 Jul; E paid 15 Jun (bank), credited to D Ltd. on 17 Jun.

→ Date of making payment by E = 15 Jun.

→ 31st day from invoice = 2 Jul.

→ ToS = Earliest of [15 Jun / 10 Jul / 2 Jul] = 15 Jun.

(Date of receipt of payment by supplier ignored — that test applies to FCM, not RCM.)

⚠️ Common exam mistakes

Treating advance receipt as ToS for goods under FCM — advance is NOT taxable except for composition suppliers and specified actionable claims.
Confusing 'date of making payment' (recipient-side) with 'date of receipt of payment' (supplier-side).
Counting from date of invoice instead of '31st day from date of invoice' under RCM (the 31st day means invoice date + 30 days).
Forgetting that if movement is not involved, due date of invoice is when goods are made available, not the date of physical movement.

Bare-Act text Section 12 · CGST Act, 2017 · click to expand

The time of supply of goods shall be the earlier of: (a) date of issue of invoice or the last date on which he is required to issue the invoice u/s 31; or (b) the date on which the supplier receives the payment with respect to the supply.

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Time of Supply for Goods - Section 12 (FCM & RCM)

Worked example

⚠️ Common exam mistakes