The 60-Day Rule: Time of Supply Under Reverse Charge

60 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 recipient liable under reverse charge often assumes the liability arises when they pay the supplier. It does not. Section 13(3) fixes the time of supply at the earlier of several events — and a long payment cycle simply means the 60-day limb catches you first.

This is one of the most common sources of interest under s.50, because the liability crystallises silently.

For services under RCM, s.13(3) makes the time of supply the earliest of: (a) the date of payment as entered in the recipient's books or debited from the recipient's bank account, whichever is earlier; (b) the date immediately following sixty days from the date of the supplier's invoice, where the supplier is required to issue it; or (c) since 01.11.2024, the date of issue of invoice by the recipient, where the invoice is to be issued by the recipient. For goods, s.12(3) uses thirty days instead of sixty.

Goods: thirty days. Services: sixty days.

Section 12(3) — goods under RCM. The earliest of:

• the date of receipt of the goods;
• the date of payment as entered in the recipient's books, or debited from the bank account, whichever is earlier; or
• the date immediately following thirty days from the date of issue of the supplier's invoice or other document.

Section 13(3) — services under RCM. The earliest of:

• the date of payment as above;
• the date immediately following sixty days from the date of the supplier's invoice, where the invoice is required to be issued by the supplier; or
• the date of issue of invoice by the recipient, where the invoice is to be issued by the recipient.

Note that goods have a receipt-of-goods limb that services do not, and a shorter thirty-day window.

What changed in 2024

The Finance (No. 2) Act, 2024, notified by Notification No. 17/2024-CT dated 27.09.2024, w.e.f. 01.11.2024, made two changes to s.13(3).

Clause (b) was qualified. It now reads "the date immediately following sixty days from the date of issue of invoice or any other document, by whatever name called, in lieu thereof by the supplier, in cases where invoice is required to be issued by the supplier".

Clause (c) was inserted: "the date of issue of invoice by the recipient, in cases where invoice is to be issued by the recipient."

The gap this fixed: where the supplier is unregistered, there is no supplier's invoice, so the 60-day clock had nothing to run from. The recipient's own self-invoice under s.31(3)(f) now supplies the reference date.

That has a sharp practical consequence. Delaying the self-invoice delays the time of supply under clause (c) — but it does not eliminate the liability, and the residual proviso still applies.

The two provisos

First proviso. Where it is not possible to determine the time of supply under clause (a), (b) or (c), the time of supply is the date of entry in the books of account of the recipient of supply.

This is the backstop. A supply recorded in the recipient's books with no payment, no supplier invoice and no self-invoice still has a time of supply — the date of the accounting entry.

Second proviso — associated enterprises. In the case of supply by associated enterprises, where the supplier of service is located outside India, the time of supply is the date of entry in the books of account of the recipient, or the date of payment, whichever is earlier.

The 60-day rule does not apply here. An Indian company recording a management fee payable to its overseas parent has a time of supply on the date of that accounting entry, however long the payment takes. Year-end accruals for group charges routinely create RCM liability in the month of the accrual entry, which is a common audit finding.

"Associated enterprises" takes its meaning from s.92A of the Income-tax Act.

Practice: how the liability is usually missed

Long payment cycles. A 90-day credit period on a notified service means the 60-day limb fires a month before payment. RCM is due in that earlier month.

Unregistered supplier, no self-invoice. Clause (c) points to the self-invoice date. Where no self-invoice is raised at all, the first proviso pulls the time of supply back to the date of the books entry.

Year-end accruals to overseas group companies. The associated enterprises proviso catches these on the accrual date.

Advance paid before invoice. The payment limb fires on payment, in full or to the extent paid.

Disputed invoices held in suspense. The 60-day clock runs from the supplier's invoice date, not from resolution of the dispute.

Consequences of getting it late

• Interest under s.50(1) at 18% from the due date of the return for the month in which the time of supply fell.
• RCM must be paid in cash. Section 49(4) permits credit utilisation only towards output tax, and RCM liability is not output tax of the recipient in that sense. A late RCM payment therefore hits cash flow twice — the tax and the interest.
• Credit timing. Credit of RCM tax is available in the period in which it is paid, subject to s.16. Paying late does not lose the credit, but s.16(4)'s outer limit still applies.
• Self-invoice discipline. From 01.11.2024, Rule 47A requires a registered person liable under RCM to issue the self-invoice within thirty days of receiving the supply from an unregistered supplier.

Key takeaways

• Goods: earliest of receipt of goods, payment, or 31st day from the supplier's invoice.
• Services: earliest of payment, 61st day from the supplier's invoice, or the recipient's self-invoice date.
• Clause (c) of s.13(3) was inserted w.e.f. 01.11.2024 for unregistered-supplier cases.
• First proviso: failing all limbs, the date of entry in the recipient's books.
• Associated enterprises with a foreign supplier: earlier of books entry or payment — no 60-day rule.
• Rule 47A: self-invoice within thirty days of receipt of the supply.

Read next

• Time of Supply Under Reverse Charge: Special Rules
• Self-Invoice for Reverse Charge Purchases
• Reverse Charge Mechanism Under GST: Complete Guide
• Date of Receipt of Payment: Books or Bank

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