Chapter IV - Time and value of supply
Section 12
Section 12: Time of supply of goods
Section 12 determines when liability to pay CGST on goods arises. The normal rule compares the invoice date or last permitted invoice date with the supplier's payment-receipt date; reverse charge has its own test.
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Need advice on Section 12?
This article is for general information. Refer to the Central Goods and Services Tax Act, 2017 official text for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
(1) The liability to pay tax on goods shall arise at the time of supply, as determined in accordance with the provisions of this section.
(2) 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 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 where the supplier of taxable goods receives an amount up to one thousand rupees in excess of the amount indicated in the tax invoice, the time of supply to the extent of such excess amount shall, at the option of the said supplier, be the date of issue of invoice in respect of such excess amount.
Explanation 1.––For the purposes of clauses (a) and (b), “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.
Explanation 2.––For the purposes of clause (b), “the date on which the supplier receives the payment” shall be the date on which the payment is entered in his books of account or the date on which the payment is credited to his bank account, whichever is earlier.
(3) In case of supplies in respect of which tax is paid or liable to be paid on reverse charge basis, the time of supply shall be the earliest of the following dates, namely:— (a) the date of the receipt of goods; or (b) the date of payment as entered in the books of account of the recipient or the date on which the payment is debited in his bank account, whichever is earlier; or (c) the date immediately following thirty days from the date of issue of invoice or any other document, by whatever name called, in lieu thereof by the supplier: Provided that where it is not possible to determine the time of supply under clause (a) or clause (b) or clause (c), the time of supply shall be the date of entry in the books of account of the recipient of supply.
(5) Where it is not possible to determine the time of supply under the provisions of sub-section (2) or sub-section (3) or sub-section (4), the time of supply shall–– (a) in a case where a periodical return has to be filed, be the date on which such return is to be filed; or (b) in any other case, be the date on which the tax is paid.
(6) The time of supply to the extent it relates to an addition in the value of supply by way of interest, late fee or penalty for delayed payment of any consideration shall be the date on which the supplier receives such addition in value.
Introduction
Under the consolidated Act, a goods supplier ordinarily uses the earlier of the invoice/last-required invoice date and receipt of payment. The Act defines receipt of payment by the earlier books or bank credit date. The former voucher subsection (4) was omitted from 1 October 2025; an older guide using it is no longer the current section text.
Key takeaways
Normal goods rule uses the earlier date
Compare invoice issue or its section 31 deadline with supplier payment receipt; use the earlier under subsection (2).
Reverse charge has three candidates
Compare receipt of goods, recipient payment date and the day immediately after 30 days from the supplier document, then apply the statutory fallback if needed.
Delayed-payment additions arise on receipt
Interest, late fee or penalty added to value for delayed consideration has its own receipt-date rule under subsection (6).
Find the ordinary time of supply
Collect invoice issue, last-required invoice and payment dates. Section 31 determines when an invoice should have been issued. For payment, use the earlier of entry in the supplier's books and bank credit, as the explanation directs.
Reverse-charge goods
Where tax is payable on reverse charge, subsection (3) uses the earliest of goods receipt, recipient payment entry/bank debit, or the date immediately after 30 days from supplier invoice or equivalent document. If those cannot be determined, use the recipient books-entry fallback.
Other statutory timing
The section contains a limited option for up to ₹1,000 excess payment above an invoice, a fallback where the primary dates cannot be determined, and a separate receipt-date rule for delayed-payment interest, late fee or penalty. Check the actual supply and period before using any of them.
Practical checklist
Do
- Keep invoice, goods-receipt, ledger and bank dates together.
- Separate ordinary and reverse-charge supplies.
- Check section 31 for the invoice deadline.
Avoid
- Apply the omitted voucher subsection (4) to current supplies.
- Use only the invoice issue date without checking its statutory deadline and payment.
Frequently asked questions
Does the invoice date always decide time of supply of goods?
No. The normal rule also compares the required invoice date and the supplier's payment-receipt date; reverse charge has a different test.
Need help applying this provision to your situation?
Contact BizeneedLast updated 10 October 2026