Section 12 of CGST Act, 2017 : Section 12: Time Of Supply Of Goods

Explanation using Example

Imagine a scenario where Mr. A runs an electronics store and sells a television to Mr. B on April 10, 2023. Mr. A issues the invoice on the same day. According to the provisions of the Central Goods and Services Tax Act, 2017, Section 12, the liability to pay GST on the television arises at the time of supply.

Under Section 12(2), the time of supply would be the earlier of the date of issue of the invoice (April 10, 2023) or the date on which Mr. A receives the payment. If Mr. B pays for the television on April 9, 2023, before the invoice is issued, the time of supply for GST purposes would be April 9, 2023.

However, if Mr. B pays an advance of INR 500 on April 9, 2023, and the remaining amount on April 10, 2023, when the invoice is issued, the time of supply for the advance amount would be April 9, 2023, and for the remainder of the payment, it would be April 10, 2023.

If instead, Mr. A was selling the television under reverse charge basis to Mr. B, and Mr. B receives the goods on April 12, 2023, but pays on April 10, 2023, then as per Section 12(3), the time of supply would be the earlier date, which is April 10, 2023.