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.
The time of supply of services decides the month in which you owe GST, whether or not the customer has paid you. Under section 13(2) of the CGST Act it is driven by three dates: the invoice, the receipt of payment and the date the service is provided. Which one wins depends on whether you invoiced within the time allowed.
Under section 13(2), if the invoice is issued within the period allowed by section 31 and Rule 47 (30 days from the supply of service, 45 days for insurers, banks and financial institutions including NBFCs), the time of supply is the earlier of the invoice date and the date of receipt of payment. If the invoice is late, it is the earlier of the date the service is provided and the date of receipt of payment. Unlike goods, advances for services are taxable when received.
The three rules in section 13(2)
Section 13(2) takes the earliest of the applicable dates:
- Clause (a): the date of issue of invoice, if the invoice is issued within the prescribed period, or the date of receipt of payment, whichever is earlier.
- Clause (b): the date of provision of service, if the invoice is not issued within the prescribed period, or the date of receipt of payment, whichever is earlier.
- Clause (c): where neither (a) nor (b) can be applied, the date the recipient shows the receipt of services in his books of account.
The supply is treated as made only to the extent covered by the invoice or the payment. The "date of receipt of payment" is the date the payment is entered in the supplier's books or the date it is credited to his bank account, whichever is earlier.
Rule 47 sets the invoice window. It is 30 days from the date of supply of service. For an insurer, a banking company or a financial institution including an NBFC, it is 45 days. Where these entities, or a telecom operator, supply services between distinct persons, the invoice may be issued before or at the time the supplier records the supply in his books, or before the end of the quarter in which the supply was made.
If your billing cycle runs on GST return filing deadlines rather than service dates, this is the rule that decides which month a supply falls into.
Worked example: advance, service, late and timely invoice
The Background Material gives this illustration. A consultant agrees a fee of Rs. 50,000. He receives Rs. 10,000 as advance on 8 April 2026, provides the service on 10 April 2026 and receives the Rs. 40,000 balance on 16 May 2026.
| Invoice issued on | Within 30 days? | Time of supply for Rs. 10,000 | Time of supply for Rs. 40,000 |
|---|---|---|---|
| 15 April 2026 | Yes | 8 April (advance received) | 15 April (invoice, earlier than payment) |
| 15 May 2026 | No, service was on 10 April | 8 April (advance received) | 10 April (service date, earlier than payment) |
Either way the advance is taxed on the day it lands. The late invoice moves the balance back from the invoice date to the service date. A missed 30-day window can pull liability into an earlier month and start interest running from there.
Small excess payments and stray charges
Three refinements catch people out:
- Excess up to Rs. 1,000. If you receive up to Rs. 1,000 more than the invoice, the time of supply for that excess can, at your option, be the date of the invoice covering it. Illustration: a telecom company receives Rs. 4,000 on 27 July 2026 against an invoice of Rs. 3,700 dated 23 July. The Rs. 300 excess need not be taxed on 27 July and can be adjusted against the next invoice.
- Excess above Rs. 1,000. There is no option. With Rs. 5,000 received against Rs. 3,700, the balance of Rs. 1,300 is taxable on 27 July.
- Interest, late fee or penalty for delayed payment. Under section 13(6) the time of supply of that addition is the date the supplier receives it, not the date of the original supply.
Continuous supply of services
A continuous supply of services under section 2(33) needs three things: services provided continuously or on a recurrent basis, a contract exceeding three months, and periodic payment obligations. Under section 31(5) the invoice must be issued:
- on or before the due date of payment, where the due date is ascertainable from the contract;
- before or at the time payment is received, where it is not; and
- on or before the completion of the event, where payment is linked to an event.
The time-of-supply test then works as above. If you invoice by the section 31(5) date, it is the earlier of invoice and payment. If you miss it, it is the earlier of the service date and payment. In Circular No. 221/15/2024-GST (NHAI hybrid annuity contracts), CBIC said that for a continuous supply the date of provision of service may be deemed to be the due date of payment, because the invoice must be issued on or before that date.
Where a supply of services ceases before it is complete, section 31(6) requires an invoice when the supply ceases, for the extent supplied. In the source illustration a two-month contract stops on 16 August 2026, the invoice is raised on 20 August and paid on 25 August. The invoice was late, so the time of supply is 16 August. The point is covered further in continuous supply of services and section 31(5).
When none of the rules fit
If section 13(2) and 13(3) cannot fix the date, section 13(5) applies as a residual rule. The time of supply is the due date of the periodical return where one is to be filed, otherwise the date the tax is paid. The material stresses that this is a last resort. See the residual time of supply for how narrowly it is read.
Services that are treated as such because of Schedule II, for example certain supplies of goods, are also governed by section 13, not section 12. For the mechanics of payment dates see date of receipt of payment.
Need help with GST timing and returns?
If invoices are going out late or advances are not being picked up in the right month, the fix is usually in the billing calendar. Our team can review your invoicing pattern and set up a month-wise return process through our GST return filing service, so liability is reported when the law says it arises. You can also ask for a health check of past periods.
Key takeaways
- Time of supply of services is the earliest of the invoice and payment dates if you invoice on time; the earlier of the service date and payment if you do not.
- The invoice window under Rule 47 is 30 days, or 45 days for insurers, banks and financial institutions.
- Advances for services are taxable on receipt; the goods advance relief does not apply to services.
- Up to Rs. 1,000 of excess payment can wait for the invoice date, at the supplier's option.
- Interest, late fee or penalty for delayed payment is taxed when received, under section 13(6).
- Continuous supplies follow the section 31(5) invoice dates.
Read next
- Time of supply under reverse charge
- Change in GST rate: section 14
- Sections 12-13 CGST: time of supply overview
- GST on advance payments
Disclaimer: Positions stated as on 30 September 2026, based on the CGST and IGST Acts and Rules as amended, the Finance Act 2026, and the ICAI Background Material on GST (14th Edition, July 2026). Verify current notifications before acting.