Time of Supply under GST - Knowing When GST Becomes Payable

5 Nov 2025 • By Asksolique.ai Team • Tax & Regulatory

Every business owner knows that GST has to be paid — but the real question is, when exactly does it become payable?

You might send an invoice one day, deliver goods another day, and get paid on a completely different date. So, which one decides when GST is due?

That’s where the concept of Time of Supply (TOS) comes in. It marks the exact moment when your liability to pay GST arises. In other words, it tells you the right month and return period in which a transaction should be reported.

What Is Time of Supply (TOS)?

TOS simply means the moment when a transaction becomes taxable under GST.

You can think of it as the trigger point — the event that tells the law, “This is when GST should be paid.”

In simple terms, which event happens first – Completion of supply, issuing the invoice, or receipt of payment - which decides when GST becomes payable. The first event is treated as the starting point for GST liability, and that is the month in which the transaction must be reported.

This rule helps make sure GST is recorded and paid in the correct period, even if the actual business dealings happen at different times.

How It Works for Goods and Services

The idea of Time of Supply applies slightly differently for goods and for services - but the underlying logic is the same: whichever event happens first creates the liability to pay GST.

Particulars	Goods	Services
Forward Charge (Supplier pays GST)	Earlier of invoice or Payment.	Earlier of Invoice (if issued in time, generally 30 days) or Payment.
If Invoice is not issued within time	Earlier of Last date to issue invoice or Payment.	Earlier of Completion of Service or Payment.
Reverse Charge (Recipient pays GST)	Earlier of Receipt of goods, Payment, or 30 days from Invoice date.	Earlier of Payment, or 60 days from Invoice date.

When GST Rates Change

Every time the GST Council revises rates, confusion follows - especially for businesses in the middle of transactions.

Particulars	Goods and Services
Supply is completed before the change	Earlier of Invoice or Payment.
Supply is completed after the change	Apply based on the sequence of Invoice and Payment: a. Both Invoice and Payment are before the rate change: → Earlier of Invoice date or Payment date b. Invoice is before rate change, Payment is after: → Payment date c. Payment is before rate change, Invoice is after: → Invoice date

In essence: the first event decides the tax point.

For instance, in September 2025, GST rates on several items were revised, and many business owners were unsure whether to charge the old rate or the new one. The rate applicable depends on when the supply, invoice, and payment took place.

Scenario	If Supply Was Before the Rate Change	If Supply Was After the Rate Change
Invoice & Payment both after rate change	Apply rate as per the earlier of invoice or payment date.	NA
Invoice is before rate change, but Payment is after	Old rate (as per invoice date)	New rate (as per payment date)
Payment is before rate change, but Invoice is after	Old rate (as per payment date)	New rate (as per invoice date)
Invoice & Payment both before rate change	NA	Rate as per earlier of invoice or payment

Note: For payment, consider whichever happened first — the date accounted in books or the date the money credited to the bank account.

Why It Matters for Every Business Owner

Knowing exactly when GST needs to be paid isn’t just about following rules — it helps you run your business smoothly. When you know the right time. Even a small mistake - like showing a sale in the wrong month - can cause trouble like extra tax, notices, or problems for your customers. Getting the timing right saves you all that headache.

Disclaimer

The information contained in this document is for information purposes only. In no way, this document should be treated as an advice. Please reach out to us or your consultants for undertaking detailed analysis.

This author will not be liable for any loss or damage caused by the reader’s reliance on information obtained through this report. The contents are provided for your reference only.