Continuous Supply of Services: Section 31(5) and the Due Date

Continuous Supply of Services 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.

An annual maintenance contract runs from April to March. A commercial lease pays monthly in advance. A retainer bills quarterly. None of these has a "date of provision of service" you can point to.

Section 31(5) deals with them, and it produces a result that surprises people: in the most common case, the tax point is the contractual due date of payment — whether or not anyone paid, and whether or not an invoice was raised.

Section 2(33) defines a continuous supply of services as a supply provided or agreed to be provided continuously or on a recurrent basis under a contract, for a period exceeding three months with periodic payment obligations — or as notified by the Government. Section 31(5) sets three cases: where the due date of payment is ascertainable from the contract, the invoice must be issued on or before that due date; where it is not ascertainable, before or at the time the supplier receives the payment; and where payment is linked to the completion of an event, on or before the date of completion of that event.

The definition

Four elements:

• provided, or agreed to be provided, continuously or on a recurrent basis;
• under a contract;
• for a period exceeding three months;
• with periodic payment obligations.

Plus anything the Government notifies as a continuous supply of services on the Council's recommendation.

The three-month threshold is a hard edge. A two-month engagement with monthly billing is not a continuous supply of services, and ordinary s.31(2) timing applies — invoice within thirty days of provision of the service.

The three cases in section 31(5)

(a) Due date of payment ascertainable from the contract. The invoice shall be issued on or before the due date of payment.

(b) Due date of payment not ascertainable from the contract. The invoice shall be issued before or at the time the supplier of service receives the payment.

(c) Payment linked to the completion of an event. The invoice shall be issued on or before the date of completion of that event.

Why case (a) is the one that bites

Section 13(2)(a) makes the time of supply the date of invoice if issued within the period prescribed under s.31, or the date of receipt of payment, whichever is earlier. Section 13(2)(b) makes it the date of provision of service if the invoice is not issued within that period.

Where the due date is ascertainable, the s.31 period ends on the due date of payment. So:

• if the invoice is issued on or before the due date, the time of supply is the earlier of that invoice date and the payment date;
• if the invoice is not issued by the due date, s.13(2)(b) applies and the time of supply is the date of provision of service — which, for a continuous supply, is generally taken as the period to which the payment relates.

Either way, the liability does not wait for the customer to pay. A lease payable on the 1st of each month creates a monthly tax point on the 1st, irrespective of whether the tenant pays on the 1st, the 20th, or at all.

That is why unbilled or unpaid rent and AMC instalments are a standing source of interest exposure. The tax was due; the money never came.

Worked cases

Commercial lease, ₹5 lakh per month, payable in advance on the 1st. Due date ascertainable. Invoice due on or before the 1st. Time of supply: the 1st of each month. Non-payment by the tenant is irrelevant.

AMC, ₹12 lakh annual, payable quarterly on 1 April, 1 July, 1 October, 1 January. Four tax points, on those four dates, each for ₹3 lakh.

Retainer with no stated payment date, billed as work accumulates. Due date not ascertainable. Case (b): invoice before or at receipt of payment. Time of supply follows the earlier of invoice or receipt.

Construction contract with payment on certification of each milestone. Case (c): invoice on or before the date the milestone is completed. The completion of the event, not the certification or the payment, is the trigger.

HAM road project for NHAI. Circular No. 221/15/2024-GST dealt with the Hybrid Annuity Mode contract, where construction and operation-and-maintenance sit in one contract with staggered annuity payments. The circular directs that the contract be looked at holistically based on the services the concessionaire performs, rather than fragmented.

Where it goes wrong

Treating the tax point as the payment date. It is not, where the due date is ascertainable.

Not invoicing a defaulting customer. The liability arose. Withholding the invoice does not withhold the tax; it moves the time of supply to the date of provision of service under s.13(2)(b), which is no better.

Escalation clauses settled later. Where a rent or AMC escalation is agreed retrospectively, a debit note under s.34(3) is required, with its own time of supply.

Free periods and rent holidays. A period with no payment obligation has no due date under case (a), but the service is still being provided. Draft the contract so the payment obligation is clear.

Termination mid-period. The tax points that have already arisen are not undone. Any refund to the customer needs a credit note under s.34(1), within the s.34(2) time limit.

Key takeaways

• s.2(33) requires a period exceeding three months with periodic payment obligations.
• s.31(5)(a): due date ascertainable → invoice on or before the due date.
• s.31(5)(b): due date not ascertainable → invoice before or at receipt of payment.
• s.31(5)(c): payment linked to an event → invoice on or before completion of the event.
• In case (a), the tax point does not depend on the customer paying.
• Contracts of three months or less fall under ordinary s.31(2) thirty-day timing.

Read next

• Continuous Supply of Goods and Section 31(4)
• Time of Supply of Services: Rules and Examples
• Debit Note and Credit Note Under GST
• GST on Renting of Immovable Property

Disclaimer: Positions stated as on 5 September 2026, based on ICAI Background Material on GST, Volume I (2026 edition) and Circular No. 221/15/2024-GST.