CHAPTER IV – TIME AND VALUE OF SUPPLY
Section 12. Time of Supply of Goods
(1) Tax liability on goods arises at time of supply.
(2) Time of supply is the earlier of:
(a) Date of invoice issuance (or last date under Section 31 to issue invoice), or
(b) Date payment is received.
Excess payments ≤ ₹1,000 can be optionally considered at invoice date.
Reverse charge supplies: earliest of: receipt of goods, payment entry/credit in recipient’s account, or 30 days after invoice. If undeterminable, use recipient’s books entry date.
Vouchers: time of supply is either voucher issuance (if identifiable) or redemption.
Other cases: periodical return filing date or date tax is paid.
Additional charges (interest, late fees, penalties): date received.
Enforced w.e.f. 1st July 2017.
Section 13. Time of Supply of Services
(1) Tax liability on services arises at time of supply.
(2) Time of supply is earliest of:
(a) Invoice date (if issued within prescribed period) or payment date, whichever earlier,
(b) Date of service provision (if invoice not issued) or payment date,
(c) Recipient’s books entry (if (a) & (b) not applicable).
Excess payments ≤ ₹1,000 treated optionally at invoice date.
Reverse charge supplies: earliest of payment entry/credit in recipient’s account, or 60 days after invoice. For international associated enterprises, earliest of recipient’s books entry or payment.
Vouchers: either issuance date (if identifiable) or redemption.
Other cases: periodical return filing date or date tax is paid.
Additional charges (interest, late fees, penalties): date received.
Enforced w.e.f. 1st July 2017.
Section 14. Change in Rate of Tax
When tax rate changes, time of supply is determined as follows:
- Before rate change:
- Invoice & payment after change → earliest of invoice or payment
- Invoice before, payment after → invoice date
- Payment before, invoice after → payment date
- After rate change:
- Payment after, invoice before → payment date
- Invoice & payment before → earliest of invoice or payment
- Invoice after, payment before → invoice date
Payment date = date credited in bank account or books, whichever earlier (considering 4 working days delay).
Enforced w.e.f. 1st July 2017.
Section 15. Value of Taxable Supply
(1) Transaction value = price actually paid/payable when supplier & recipient are not related and price is sole consideration.
(2) Includes:
(a) Taxes, duties, fees (except CGST, SGST, UTGST, Compensation Cess) if charged separately,
(b) Expenses incurred by recipient but payable by supplier,
(c) Incidental expenses (commission, packing, other supplier charges),
(d) Interest, late fees, penalties for delayed payment,
(e) Subsidies directly linked to price (except government subsidies).
(3) Excludes discounts:
- Recorded in invoice at/before supply,
- Post-supply if agreed in advance and input credit is reversed.
(4) & (5) If value cannot be determined or is notified by government, prescribed methods apply.
Explanation:
- Related persons: directors/officers of each other, partners, employer/employee, ≥25% ownership/control, common third-party control, or same family.
- Associated persons: sole agents, distributors, or concessionaires of each other.