Goods Received in Lots: Credit Waits for the Last Instalment

Goods Received in Lots 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.

One invoice for a complete plant, delivered across four shipments over five months. The invoice is dated March. The last shipment arrives in August.

When is the credit available?

The first proviso to s.16(2) provides: "where the goods against an invoice are received in lots or instalments, the registered person shall be entitled to take credit upon receipt of the last lot or instalment." The whole credit — not a proportionate part — waits for the final delivery.

The rule

Section 16(2)(b) requires that the person has received the goods. Where an invoice covers goods delivered in stages, the condition is not satisfied until the goods described in the invoice have all arrived.

The proviso confirms the point and settles the alternative that would otherwise be arguable: no proportionate credit on each lot. It is all or nothing, and it is nothing until the last lot lands.

Where it bites

Year-end straddles. An invoice dated March 2026 whose final lot arrives in June 2026 carries credit that becomes available in June — but the s.16(4) deadline is keyed to the invoice's financial year, so it is 30 November 2026. A long delivery schedule eats the window.

Very long schedules. An invoice dated February 2026 with the last lot arriving in March 2027 has a credit that becomes available after the 30 November 2026 deadline for FY 2025-26 invoices. The credit is lost.

That outcome is harsh and is the strongest practical argument for invoicing per lot rather than raising one invoice against a staggered delivery.

Project and plant supplies. Capital equipment supplied in modules is the classic case.

Consignment shipments. Where an import order is split across containers with one commercial invoice, the bill of entry position governs for customs and the s.16(2) proviso for the domestic leg.

What is a "lot or instalment"

The proviso applies where goods against an invoice are received in lots. Two conditions:

One invoice. Separate invoices for separate deliveries do not engage the proviso at all — each invoice stands on its own receipt.

Goods, not services. The proviso speaks of goods received in lots. A service delivered in stages is governed by the time of supply and invoicing provisions, not this proviso. Where a service contract has milestones, each milestone typically carries its own invoice under s.31(5)(c). Continuous supply of services →

The supplier's position is different

The proviso governs the recipient's credit. It does not affect the supplier's liability.

Under s.12(2)(a), the supplier's time of supply is the earlier of the invoice date and the s.31 due date. Having raised a March invoice, the supplier pays tax in March.

So the tax is with the Government from March; the credit reaches the recipient in August. The gap is a real working capital cost borne by the recipient, and it is worth pricing.

Practical responses

Invoice per lot. The cleanest fix. Each delivery gets its own invoice, and credit follows each receipt. Section 31(1) supports this — the invoice is due before or at removal, and each removal is a separate event.

Where one invoice is commercially necessary, use a delivery challan under Rule 55 for each movement, with the invoice raised at the final despatch. Rule 55(4) expressly contemplates goods being transported in a semi-knocked down or completely knocked down condition, or in batches or lots, with the complete invoice issued before despatch of the first consignment and delivery challans for each subsequent one.

Track the last-lot date against the s.16(4) deadline for the invoice's financial year, and escalate where the two conflict.

Record receipt of each lot with dated documentation — goods receipt notes, weighbridge slips, e-way bill part B entries. The last-lot date is the credit date and it must be evidenced.

Key takeaways

• The first proviso to s.16(2): credit on a lot-wise delivery arises on receipt of the last lot.
• No proportionate credit on earlier lots.
• The s.16(4) deadline still runs from the invoice's financial year — a long schedule can extinguish the credit.
• The proviso applies to goods against one invoice, not to services.
• The supplier pays tax on the invoice date regardless.
• Rule 55(4) supports the delivery-challan route for knocked-down and batch supplies.

Read next

• Four Conditions for Claiming ITC Under Section 16(2)
• The ITC Time Limit Under Section 16(4)
• Delivery Challan Under GST
• Bill-To Ship-To: Deemed Receipt Under Section 16(2)(b)

Disclaimer: Positions stated as on 5 September 2026, based on the CGST Act and Rules as amended to 31 March 2026 (ICAI Bare Law, 12th edition).