Date of payment not to be considered in case of supply of goods

Raju Choudhary

Staff member
Date of payment not to be considered in case of supply of goods. Time of supply in case of goods as per Section 12(2) has been stated to be earlier of the following dates:
  • a) Date of issue of invoice or the last date on which he is required to issue the invoice with respect to the supply
  • b) Date on which supplier receives the payment with respect to the supply
The introduction of the date of payment as the time of supply under GST was a completely new concept for supplier of goods. Under the Excise and VAT law, the person manufacturing/selling goods did not consider the date of payment at all while making the payment of taxes. The introduction of GST led to an additional process for these persons supplying goods. Receipt of advance led to the time of supply to arise under GST. Lack of proper knowledge of this rule, infrastructural and administrative difficulties faced by supplier of goods particularly in the SME segment prompted the Government to remove the condition of date of payment while determining the time of supply. However, this was made in a phased manner.

Vide Notification No. 66/2017-Central Tax dated 15th November 2017, all persons making supply of goods if they have not opted for composition scheme need to pay taxes considering only (a) above. Hence all supplier of goods can consider the time of supply as date of issue or last date of issue of invoice without considering the date of payment. It may be noted that this provision is only for supply of goods and not supply of services.