Time of Supply 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.
Section 8 tells you the rate for a bundled supply. It is silent on when the liability arises — and since goods and services have different time-of-supply rules, a bundle containing both needs an answer.
The Act supplies one indirectly, through the way s.8 is drafted.
Section 8(a) provides that a composite supply "shall be treated as a supply of such principal supply". That deeming is complete — the whole supply is the principal supply for every purpose, so s.12 applies if the principal supply is goods and s.13 applies if it is services. Section 8(b) treats a mixed supply as a supply of "that particular supply which attracts the highest rate of tax", so the timing rules follow that element.
Composite supply: the principal supply's clock
Because s.8(a) treats the entire composite supply as a supply of the principal supply, everything follows from that characterisation:
- the rate of the principal supply;
- the classification — HSN if goods, SAC if services;
- the place of supply rules applicable to that category;
- the invoice timing under s.31(1) for goods or s.31(2) for services; and
- the time of supply under s.12 for goods or s.13 for services.
Two worked cases show why it matters.
Machine supplied with erection and commissioning. The machine is the principal supply — goods. So:
- invoice due before or at removal under s.31(1);
- time of supply is the earlier of the invoice date and the s.31 due date under s.12(2), with advances not taxable under Notification 66/2017;
- an e-way bill is required for the movement.
The erection service does not get its own thirty-day invoicing window or its own advance treatment. It has no separate existence.
Annual maintenance contract including spare parts. Where the service is the principal supply:
- invoice due within thirty days under Rule 47, or under s.31(5) if it is a continuous supply;
- time of supply under s.13(2), so advances are taxable on receipt;
- a receipt voucher is required for advances.
Same two ingredients, opposite timing rules, decided entirely by which is principal.
Mixed supply: the highest-rate element's clock
Section 8(b) uses the same deeming structure — the mixed supply "shall be treated as a supply of that particular supply which attracts the highest rate of tax".
So identify the element with the highest rate, and that element's category governs:
- if it is goods, s.12 and s.31(1) apply to the whole bundle;
- if it is services, s.13 and s.31(2) apply.
A hamper containing a 40% carbonated beverage and 5% dry fruits, sold for a single price, is a mixed supply taxed at 40%. Both elements are goods, so the timing question is easy.
A bundle containing goods at 18% and a service at 5%, single-priced, is a mixed supply taxed at 18% — and because the highest-rate element is goods, the whole bundle follows the goods timing rules, including the advance relief.
That is a slightly counter-intuitive result, and it follows directly from the deeming language.
The advance is where it bites
The practical difference between the two regimes is advances.
- Goods — advances are not taxable for most registered persons under Notification 66/2017-CT.
- Services — advances are taxable on receipt under s.13(2), with a receipt voucher under s.31(3)(d) and reporting in GSTR-1 Table 11A.
So the composite/mixed characterisation, and the identification of the principal or highest-rate element, decides whether a 30% mobilisation advance on a bundled contract is taxable when received.
Getting this wrong in either direction is costly: taxing an advance that is not taxable overstates liability and complicates the later invoice; not taxing one that is taxable attracts interest under s.50.
Practical notes
- Decide the characterisation before the first money moves, not at invoicing. The advance treatment depends on it.
- Record the principal supply in the contract and on the invoice, with a consistent HSN or SAC.
- Where a works contract is involved, s.2(119) and Schedule II paragraph 6(a) settle it as a supply of services by definition, so s.13 timing applies. Works contract classification →
- Where the bundle is a continuous supply, s.31(4) or s.31(5) displaces the ordinary invoice timing.
- For e-invoicing, the payload carries a single document type; a composite supply is one line-set under the principal supply's classification, not two documents.
Key takeaways
- s.8(a) deems a composite supply to be the principal supply — so s.12 or s.13 applies according to whether that is goods or services.
- s.8(b) deems a mixed supply to be the highest-rate element, and timing follows that element.
- The deeming is complete — rate, classification, place of supply, invoicing and timing all follow.
- The practical difference is the taxability of advances.
- A works contract is a supply of services by definition, so s.13 timing applies.
- Fix the characterisation before receiving any advance.
Read next
- Identifying the Principal Supply
- Mixed Supply and the Single Price
- No GST on Advances for Goods
- Section 8 CGST Act: Composite and Mixed Supplies
Disclaimer: Positions stated as on 5 September 2026, based on ICAI Background Material on GST, Volume I (2026 edition).