Section 13 of CGST Act: Time of Supply of Services Explained with Examples and Tables

Section 13 of the CGST Act, 2017 outlines the provisions for determining the time of supply of services, which is crucial for identifying when GST liability arises. It specifies different timelines based on whether the invoice is issued on time, delayed, or in cases of reverse charge. Amendments effective from 1st November 2024 have updated clauses related to reverse charge scenarios, including invoice issuance by the recipient.

The section also covers provisions for excess payments, interest or penalties, and fallback rules when standard methods do not apply. AUBSP provides this comprehensive guide to help taxpayers ensure accurate and timely GST compliance.

Understanding GST Section 13: Time of Supply of Services

In the realm of Goods and Services Tax (GST), determining the “time of supply” is essential for identifying when the liability to pay tax arises. Section 13 of the Central Goods and Services Tax (CGST) Act, 2017 exclusively deals with the Time of Supply of Services. As your trusted source, AUBSP is here to help you understand the provisions of this section in a simplified and structured manner.

Whether you’re a business owner, tax professional, or student, grasping Section 13 is crucial to ensuring timely compliance and avoiding penalties.

What is Time of Supply under Section 13?

Section 13(1): Trigger for Tax Liability

The liability to pay tax on a service arises at the “time of supply” determined as per the rules mentioned in this section. This means that even before the tax is paid or the return is filed, the tax liability kicks in once the time of supply is triggered.

Section 13(2): Time of Supply in General Cases

In general, the time of supply of services is the earliest of the following:

1. Invoice issued on time:
   • Date of invoice or
   • Date of receipt of payment,
     whichever is earlier.
2. Invoice not issued on time:
   • Date of provision of service or
   • Date of receipt of payment,
     whichever is earlier.
3. In all other cases:
   • Date on which the recipient records the service in their books of account.

💡 Note from AUBSP: The timing of issuing the invoice is critical. As per Section 31, the invoice must be issued within 30 days from the provision of service.

Special Provision: Small Excess Payments

If the supplier receives up to ₹1,000 in excess of the amount stated in the tax invoice, they may opt to treat the date of invoice for the excess as the time of supply.

Explanation Clause

• Partial Payment or Invoice: Time of supply is only to the extent of the amount covered.
• Date of Receipt of Payment: Whichever is earlier—
  • Date entered in books of account, or
  • Date credited to bank account.

Section 13(3): Time of Supply under Reverse Charge Mechanism (RCM)

In cases where services are taxable under reverse charge, the recipient is liable to pay tax. The time of supply here is the earliest of:

1. Date of Payment:
   • As recorded in recipient’s books or debited from the bank account.
2. Date After 60 Days:
   • From the date of supplier’s invoice or similar document.
3. Date of Recipient’s Invoice(Inserted via 2024 amendment):
   • If the recipient is required to issue the invoice.

If none of the above are determinable, the date of entry in the recipient’s books shall be the time of supply.

For associated enterprises where the supplier is outside India:

• Time of supply is the earlier of:
  • Date of payment, or
  • Date of entry in recipient’s books.

Key Dates and Amendments

Section 13(5): Residual Time of Supply

When it is not possible to determine the time of supply under subsections (2), (3), or (4), fallback rules apply:

• If a periodic return is required:
  → Due date of that return is the time of supply.
• In any other case:
  → Date of payment of tax is the time of supply.

Section 13(6): Interest, Late Fee, or Penalty

Any additional consideration received (e.g., for late payment, interest, or penalty) will have its own time of supply, which is the date of receipt of that amount by the supplier.

FAQs on Time of Supply of Services

What is Section 13 of the CGST Act, 2017?
Section 13 deals with the determination of the time of supply of services under GST, which is essential to identify when the tax liability arises.

When does the liability to pay GST on services arise?
The liability arises at the time of supply as determined under Section 13, which could be the earliest of invoice issuance, receipt of payment, or provision of service.

How is the time of supply determined when an invoice is issued within the prescribed time?
It is the earlier of the date of invoice or the date of receipt of payment.

What if the invoice is not issued within the prescribed period under Section 31?
In such cases, the time of supply is the earlier of the date of provision of service or the date of receipt of payment.

What happens if neither of the above applies?
The time of supply will be the date on which the recipient records the service in their books of account.

What is the prescribed time limit for issuing an invoice under Section 31?
Normally, the invoice must be issued within 30 days from the date of provision of the service.

Can the supplier choose the time of supply in case of small excess payments?
Yes, if the excess amount received is up to ₹1,000, the supplier may opt to treat the date of invoice for that excess as the time of supply.

What is meant by “date of receipt of payment”?
It is the earlier of the date when the payment is entered in the books of account or the date when it is credited to the supplier’s bank account.

How is the time of supply determined under reverse charge mechanism (RCM)?
It is the earliest of the date of payment (entered in books or debited in bank) or 60 days from the date of the supplier’s invoice. If not determinable, it is the date of entry in the recipient’s books.

Has Section 13(3) been amended recently?
Yes, amendments made via the Finance (No. 2) Act, 2024, effective from 1st November 2024, included substitution of clause (b) and insertion of clause (c).

What is the time of supply if the recipient issues the invoice under reverse charge?
The time of supply is the date of issue of the invoice by the recipient, as per the newly inserted clause (c) under Section 13(3).

What if none of the provisions under subsection (2), (3), or (4) apply?
Then, as per Section 13(5), the time of supply is the due date of the return (if applicable) or the date on which the tax is actually paid.

What happens if interest, late fee, or penalty is received for delayed payment?
The time of supply for such additional consideration is the date on which the supplier receives the amount.

What is the time of supply in case of associated enterprises located outside India?
It is the earlier of the date of entry in the recipient’s books or the date of payment.

When was Section 13 brought into effect?
Section 13 came into force on 1st July 2017 through Notification No. 9/2017-Central Tax.

What is the significance of the time of supply?
It determines the exact point when the tax liability under GST arises, which impacts tax compliance and filing.

Does Section 13 apply to goods?
No, Section 13 applies only to the supply of services. The time of supply for goods is covered under Section 12.

Can the time of supply be different for a single transaction?
Yes, depending on partial payments or invoices, the time of supply can differ for each part of the transaction.

What is the fallback mechanism for determining the time of supply?
If it cannot be determined under other clauses, the fallback is the due date of return or the actual date of tax payment.

Is interest for delayed payment treated as a separate supply?
No, but the additional value received is taxed, and the time of supply is when the supplier receives the interest or penalty.

Has any part of Section 13 been omitted?
Yes, Section 13(4) has been omitted by the Finance Act, 2025.

Where can I find authentic updates about Section 13 and GST rules?
You can stay updated through reliable sources like the official GST portal, government notifications, and platforms like AUBSP.

Why is AUBSP a trusted source for GST guidance?
AUBSP offers professionally researched content, timely updates, and expert insights to help taxpayers and professionals stay compliant and informed.

What should businesses do to ensure compliance with Section 13?
They should maintain accurate invoicing practices, timely payment records, and monitor updates to GST laws through trusted platforms like AUBSP.

Does Section 13 apply differently for composition taxpayers?
Section 13 generally applies to all service providers; however, composition taxpayers follow different rules under Section 10 for tax payment.

How does time of supply impact GST return filing?
It determines in which tax period the transaction must be reported and the tax paid, thereby affecting the accuracy of GST returns.

Can time of supply be corrected once determined?
In rare and specific cases through rectification of returns, but incorrect determination may lead to interest and penalties.

Is GST payable if service is provided but no payment is received?
Yes, if the invoice is issued and time of supply is triggered, GST is payable irrespective of whether payment is received.

Is date of payment the same as date of realization in bank?
Not necessarily. It is the earlier of the date recorded in books or credited in bank account.

Understanding Section 13 is essential for every service provider and recipient under GST. By clearly establishing when the tax liability arises, it ensures better financial planning and timely compliance.

At AUBSP, we believe that tax knowledge empowers businesses to operate efficiently and legally. From regular service transactions to reverse charge and international dealings, Section 13 provides a structured mechanism to determine tax timelines.

If you’re unsure how these provisions apply to your situation, we recommend consulting with a qualified GST practitioner or staying updated with AUBSP for more such insights.