Continuous Supply of Goods: Section 31(4) and the Invoice Date

Continuous Supply of Goods explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.

A gas supplier delivers through a pipeline. A vendor supplies components under a running schedule with monthly reconciliation. There is no single removal, no single delivery, no obvious invoice trigger.

Section 31(1) — invoice before or at removal, or before or at delivery — does not describe these arrangements. Section 31(4) was written for them, and because the invoice due date is a limb of the time of supply, it decides the tax point.

Section 2(32) defines a continuous supply of goods as a supply provided or agreed to be provided continuously or on a recurrent basis, under a contract, whether or not by means of a wire, cable, pipeline or other conduit, and for which the supplier invoices the recipient on a regular or periodic basis — including a supply the Government notifies as such. Section 31(4) then requires the invoice to be issued before or at the time each statement is issued or each payment is received. That date is the "last date on which the invoice is required to be issued", and therefore the time of supply under s.12(2)(a).

The definition, element by element

Continuously or on a recurrent basis, under a contract. A one-off supply repeated occasionally is not continuous. There must be a contract contemplating recurrence.

Whether or not by means of a wire, cable, pipeline or other conduit. The conduit language covers utilities, but the definition is not limited to them. A running supply contract with monthly reconciliation qualifies.

For which the supplier invoices the recipient on a regular or periodic basis. The billing pattern is part of the definition, not merely evidence of it.

Including supply notified by the Government on the Council's recommendation.

What section 31(4) requires

"In case of continuous supply of goods, where successive statements of accounts or successive payments are involved, the invoice shall be issued before or at the time each such statement is issued or, as the case may be, each such payment is received."

Two triggers, whichever the contract uses:

• successive statements of account — invoice before or at each statement;
• successive payments — invoice before or at each payment.

How it interacts with Notification 66/2017

This is the part that repays careful reading, and the ICAI commentary works through it.

Notification No. 66/2017-CT removed s.12(2)(b) — the date of receipt of payment — from the time of supply for goods. So payment, as such, no longer triggers tax.

But s.12(2)(a) retains "the last date on which the supplier is required to issue the invoice under section 31". And s.31(4) fixes that last date by reference to the statement or the payment.

So the payment date returns — indirectly, as the invoice due date rather than as a payment trigger.

The commentary's conclusion: the time of supply is the earlier of the date of receipt of the successive payment (being the last date of issuance of the invoice) or the actual date of issue of the invoice.

And a point worth underlining: the due date on which the payment ought to have been received is immaterial. Neither the time-of-supply provisions nor s.31(4) refer to a contractual due date — only to the statement actually issued or the payment actually received. A payment falling due on 30 April but received on 20 May fixes the invoice due date at 20 May.

Worked example

A components supplier delivers against a running schedule. The contract provides for a monthly statement on the 5th and payment within 30 days.

In April and May, the statement was the earlier trigger. In June the payment arrived before the statement, so the invoice due date was 5 July and the time of supply moved with it.

Note the May row: the supplier issued the invoice on 20 June, but the statement on 5 June had already fixed the last date for issuing it. The time of supply is 5 June — the earlier of the two.

Practical notes

• Map the contract to a trigger. Does it run on statements, on payments, or both? Where both, the earlier one governs each cycle.
• Do not rely on the contractual payment due date. Only the actual statement or actual receipt matters.
• Issue the invoice on the statement, not after. Where the invoice lags the statement, tax is due from the statement date and interest accrues from the return due date for that month.
• Where the contract has no statements and no successive payments, it may not be a continuous supply at all, and ordinary s.31(1) removal-or-delivery timing applies.
• E-invoicing applies on the same trigger — the IRN must be generated for the invoice raised against each statement.
• Continuous supply of services is governed separately by s.31(5), with a different structure keyed to the due date of payment. Continuous supply of services →

Key takeaways

• s.2(32) defines continuous supply of goods by recurrence under a contract plus regular or periodic invoicing.
• s.31(4) requires the invoice before or at each statement or each payment.
• That date is the last date for issuing the invoice, and therefore a limb of the time of supply.
• Notification 66/2017 removes payment as a direct trigger, but it returns through s.31(4).
• The contractual due date of payment is irrelevant — only the actual statement or receipt counts.
• Issuing the invoice after the statement does not defer tax.

Read next

• No GST on Advances for Goods
• Continuous Supply of Services and Section 31(5)
• Time of Supply of Goods: When Liability Arises
• Tax Invoice Under GST: Format, Contents and Rules

Disclaimer: Positions stated as on 5 September 2026, based on ICAI Background Material on GST, Volume I (2026 edition).