When it comes to GST, determining when the tax liability arises is as important as calculating how much to pay. While goods are tangible and easier to track, services are trickier — they’re often provided over time, billed later, or paid in advance.
That’s why the time of supply for services needs special attention. It ensures GST is paid at the correct time — not too early and not too late.
In this blog, we’ll break down the time of supply of services under Section 13 of the CGST Act, explain how it differs from goods, and go through real examples for full clarity.
What is Time of Supply for Services?
In GST, the “time of supply” determines the exact point when a taxable event occurs — that is, when GST becomes payable on a particular transaction.
For services, this timing is governed by Section 13 of the CGST Act, 2017.
It’s different from goods because:
- Services don’t involve physical movement, and
- They can be continuous, periodic, or milestone-based.
So, instead of focusing on delivery, GST law focuses on invoicing and payment to determine the liability date.
Legal Provision – Section 13(2) (Forward Charge)
Section 13(2) states:
“The time of supply of services shall be the earlier of the following dates:
- the date of issue of invoice by the supplier, if the invoice is issued within the period prescribed under Section 31(2); or
- the date of receipt of payment; and if the invoice is not issued within the period prescribed, the time of supply shall be the date of provision of the service.”
If it’s not possible to determine from these, it defaults to the date of entry in books.
Let’s simplify this.
Step-by-Step Rule Simplified
Under forward charge, GST liability for services arises at the earlier of:
- Invoice date (if issued within the allowed time), or
- Payment date, whichever is earlier.
But, if the invoice is delayed, the liability shifts to the date of service completion/provision.
And if nothing else fits, the fallback is the date of entry in books of accounts.
Invoice Timeline for Services – Section 31(2)
For services, the law gives suppliers 30 days from the date of supply to issue an invoice (for banks and NBFCs — 45 days).
So, if you provide a service on 1st June:
- If the invoice is issued by 30th June, the earlier of invoice date or payment date becomes your time of supply.
- If the invoice is issued after 30th June, the time of supply becomes 1st June (date of service).
Examples – Forward Charge
Let’s go through practical cases.
Example 1 – Invoice within Time, Payment Later
A Ltd. provides consultancy services to B Ltd. on 10th July, issues an invoice on 20th July, and receives payment on 5th August.
Time of Supply: 20th July (invoice date)
Because the invoice was issued within 30 days, GST liability arises on the invoice date.
Example 2 – Payment Received Before Invoice
A Ltd. provides services on 10th July, receives advance payment on 5th July, and issues the invoice on 20th July.
Time of Supply: 5th July (payment date)
Because payment came before invoicing, GST is triggered on the earlier event — payment.
Example 3 – Invoice Not Issued in Time
A Ltd. provides services on 10th July but delays the invoice until 25th August, and payment is received on 20th August.
Time of Supply: 10th July (date of service provision)
Since the invoice was issued after 30 days, GST liability is linked to the service date, not the invoice or payment date.
Example 4 – Advance Payment Received
M Ltd. receives ₹1,00,000 advance on 1st June for services to be rendered on 25th June. Invoice issued on 30th June.
Time of Supply: 1st June (advance date)
Unlike goods, services attract GST on advance payments — the liability arises when the payment is received.
How “Date of Receipt of Payment” is Calculated
As per Explanation 2 to Section 13(2):
“The date of receipt of payment shall be the date on which the payment is entered in the supplier’s books of account or the date on which the payment is credited to the supplier’s bank account, whichever is earlier.”
This ensures that GST can’t be delayed by postponing accounting entries.
Continuous Supply of Services – Section 31(5)
Many service contracts (like rent, telecom, consultancy, construction, etc.) are continuous in nature. For these, GST law provides special rules:
“Where the supply of services is for a period on a continuous or recurring basis, the invoice shall be issued –
- on or before the due date of payment if such date is ascertainable from the contract;
- before or at the time of receipt of payment if the due date is not ascertainable; or
- on completion of the event to which the payment relates.”
Example 5 – Monthly Contract with Fixed Due Date
M Ltd. provides annual maintenance services from April to March. Payment is due on 10th of every month as per contract.
Time of Supply: For each month → 10th day of that month (due date).
If payment is delayed, GST is still triggered on the due date, not when payment is actually made.
Example 6 – Contract Without a Fixed Due Date
Suppose a service provider maintains equipment for a company, but the payment schedule isn’t specified. He issues invoices after receiving payments irregularly.
Time of Supply: Date of each payment — since there’s no predetermined due date.
Example 7 – Event-Based Payment
A construction company provides services under a milestone contract. Payment is due on completion of each project stage.
Time of Supply: Date of completion of each event (milestone) — since the event defines the taxable point.
Reverse Charge for Services – Section 13(3)
Under reverse charge, GST liability shifts to the recipient of services.
In that case, time of supply is the earliest of:
- The date of payment, or
- 60 days from the date of supplier’s invoice.
If neither applies, it defaults to the date of entry in books of accounts.
Example 8 – Reverse Charge Scenario
Invoice issued: 4th June Payment made: 25th July (60 days from invoice = 3rd August)
Time of Supply: 25th July (earlier of payment date or 60 days)
If payment had been made after 3rd August, the time of supply would’ve been 4th August (the day after 60 days).
Associated Enterprises – Special Rule (Import of Services)
For services received from associated enterprises located outside India, time of supply is the earlier of:
- Date of entry in recipient’s books, or
- Date of payment.
This ensures timely tax on cross-border service transactions.
Example 9 – Import of Service from Foreign Parent Company
Indian company (A Ltd.) receives consulting services from its U.S. parent company on 10th July. Payment made on 20th August, but the transaction was recorded in books on 25th July.
Time of Supply: 25th July (date of entry in books)
Even though payment happened later, GST liability under reverse charge arises when it’s booked.
Interest or Late Fees – Section 13(6)
Just like for goods, if you charge interest, late fees, or penalties for delayed payment, GST on that additional amount becomes payable when you receive it.
Example 10 – Late Payment Interest
A Ltd. provides design services on 1st June with a 15-day payment clause. Client pays on 30th June, along with ₹1,000 as interest.
- GST on service: 1st June (invoice date)
- GST on interest: 30th June (date of receipt of interest)
Summary Table – Time of Supply for Services
| Scenario | Time of Supply |
| Invoice within 30 days | Earlier of invoice or payment |
| Invoice delayed | Date of service provision |
| Advance payment | Date of payment |
| Continuous supply – fixed due date | Due date of payment |
| Continuous supply – no due date | Date of payment |
| Event/milestone-based | Date of event completion |
| Reverse charge | Earlier of payment or 60 days |
| Import from associate (outside India) | Earlier of payment or book entry |
| Interest on late payment | Date of receiving interest |
Key Differences – Goods vs Services
| Aspect | Goods | Services |
| Governing Section | 12 | 13 |
| Invoice timing | Before or at delivery | Within 30 days after supply |
| GST on advance | No (after Notification 66/2017) | Yes |
| Reverse charge window | 30 days | 60 days |
| Continuous supply | Invoice at each delivery | Invoice per due date/payment/event |
Key Takeaways
- For services, GST on advance is mandatory - Even a token payment triggers liability.
- Watch the 30-day invoice rule. If you miss it, the time of supply backdates to the service date.
- Continuous or milestone-based services need clear contracts. That’s how you determine the “due date” for invoicing.
- Reverse charge and imports have longer timelines (60 days).
- GST on late fees or penalties is payable only when received.
Final Thoughts
Understanding the time of supply of services is crucial for accurate GST compliance. Unlike goods, service contracts often involve advance payments, periodic billing, and event-based milestones — all of which can change when GST becomes payable.
Once you grasp how Section 13 works, you can easily map your invoicing, payments, and filings to ensure you’re always paying GST on time — neither too early nor too late.
It’s all about one golden rule:
“The earlier of invoice or payment — unless you miss the deadline! ”
