Section 12 fixes when the liability to pay tax on goods arises, and so in which return period the tax is due. For a supplier it is the earlier of invoicing and payment; for a recipient paying on reverse charge, the earliest of receipt, payment and thirty days after the supplier's invoice.
Key points
- Under section 12(2) of the CGST Act, 2017 the time of supply of goods is the earlier of the date of the invoice (or the last date by which it should have been issued under section 31) and the date the supplier receives payment.
- Advances for goods do not, in practice, attract tax at receipt: Notification 66/2017-Central Tax applies the invoice date alone to suppliers of goods other than composition taxpayers.
- For goods on reverse charge, the time of supply is the earliest of receipt of goods, payment, or the day after thirty days from the supplier's invoice (section 12(3)).
- The rule for vouchers in section 12(4) was omitted from 01.10.2025 by the Finance Act, 2025.
The provisions
12(1)–(2)Forward charge: invoice or payment
Statutory text
(1) The liability to pay tax on goods shall arise at the time of supply, as determined in accordance with the provisions of this section.
(2) The time of supply of goods shall be the earlier of the following dates, namely:-
(a) the date of issue of invoice by the supplier or the last date on which he is required, under 1[****] section 31, to issue the invoice with respect to the supply; or
(b) the date on which the supplier receives the payment with respect to the supply:
Provided that where the supplier of taxable goods receives an amount up to one thousand rupees in excess of the amount indicated in the tax invoice, the time of supply to the extent of such excess amount shall, at the option of the said supplier, be the date of issue of invoice in respect of such excess amount.
Explanation 1.- For the purposes of clauses (a) and (b), "supply" shall be deemed to have been made to the extent it is covered by the invoice or, as the case may be, the payment.
Explanation 2.- For the purposes of clause (b), "the date on which the supplier receives the payment" shall be the date on which the payment is entered in his books of account or the date on which the payment is credited to his bank account, whichever is earlier.
*Enforced w.e.f 01st July, 2017.
1. Omitted "sub-section (1) of " by s. 6 of The Central Goods and Services Tax (Amendment) Act, 2018 (No. 31 of 2018) - Brought into force w.e.f. 01st February, 2019.
- Notification 66/2017-Central Tax, 15.11.2017 — no tax on advances for goods
12(3)Reverse charge
Statutory text
(3) In case of supplies in respect of which tax is paid or liable to be paid on reverse charge basis, the time of supply shall be the earliest of the following dates, namely:-
(a) the date of the receipt of goods; or
(b) the date of payment as entered in the books of account of the recipient or the date on which the payment is debited in his bank account, whichever is earlier; or
(c) the date immediately following thirty days from the date of issue of invoice or any other document, by whatever name called, in lieu thereof by the supplier:
Provided that where it is not possible to determine the time of supply under clause (a) or clause (b) or clause (c), the time of supply shall be the date of entry in the books of account of the recipient of supply.
What it means
For goods taxed in the recipient's hands, the time of supply is the earliest of: the date of receipt of the goods; the date of payment (book entry or bank debit, whichever is earlier); and the day immediately following thirty days from the supplier's invoice. If none can be determined, the date of entry in the recipient's books.
12(4)–(6)Vouchers; residual rule; interest and late fees
Statutory text
(4) 2[****]
(5) Where it is not possible to determine the time of supply under the provisions of sub-section (2) or sub-section (3) or sub-section (4), the time of supply shall-
(a) in a case where a periodical return has to be filed, be the date on which such return is to be filed; or
(b) in any other case, be the date on which the tax is paid.
(6) The time of supply to the extent it relates to an addition in the value of supply by way of interest, late fee or penalty for delayed payment of any consideration shall be the date on which the supplier receives such addition in value.
2. Omitted (w.e.f. 01.10.2025) "In case of supply of vouchers by a supplier, the time of supply shall be- (a) the date of issue of voucher, if the supply is identifiable at that point; or (b) the date of redemption of voucher, in all other cases." by s. 122 of the Finance (No. 7 of 2025) Act, 2025.
What it means
Sub-section (4) set the time of supply of vouchers — the date of issue if the supply was identifiable then, otherwise the date of redemption. It was omitted from 01.10.2025 by the Finance Act, 2025, after CBIC Circular 243/37/2024-GST (31.12.2024) clarified that transactions in vouchers are neither a supply of goods nor of services — only the underlying supply, when the voucher is redeemed, is taxed.
Sub-section (5) is the fallback: the due date of the periodical return or, otherwise, the date the tax is paid. Sub-section (6): interest, late fee or penalty for delayed payment of consideration is part of value (section 15(2)(d)) and is taxed when the supplier receives it.
Statutory text as published on the CBIC tax information portal, as on 03.10.2026; the numbered notes record each amendment. Official source
Common questions
- Is GST payable on advances received for goods?
- No, for regular taxpayers. Notification 66/2017-Central Tax fixes the time of supply of goods at the invoice, so advances for goods are not taxed on receipt.
- When is GST payable on goods under reverse charge?
- At the earliest of receipt of goods, payment, or the day after thirty days from the supplier's invoice (section 12(3) CGST).
Commentary and case notes checked against the judgments and CBIC sources on 04.10.2026.
What it means
The time of supply is the earlier of (a) the date of issue of the invoice, or the last date by which it should have been issued under section 31, and (b) the date the supplier receives payment — the earlier of the entry in its books and the credit to its bank account (Explanation 2). A small excess receipt, up to Rs. 1,000 over the invoice, may at the supplier's option be taxed on the invoice date for that excess.
In practice clause (b) does not operate for most suppliers of goods: Notification 66/2017-Central Tax (15.11.2017) provides that registered persons other than composition taxpayers pay tax on supply of goods at the time of supply under clause (a) — the invoice — so advances received for goods do not attract tax on receipt.
Explanation 1: the supply is deemed made to the extent covered by the invoice or payment, so a part-payment fixes the time of supply only for that part.