12.2 TOS of goods under forward charge

Example-1

Analysis

S-12(2) – TOS shall be earlier of 

Therefore, time of supply = 5th August 2025

12.2.0.1 Meaning of Date of receipts of payment by the supplier

Example-1

(1) Statutory Provision

(a) Explanation 2 to section 12(2) - Date of receipt of payment is

Earlier of (10 Aug, 12 Aug) = 10th August 2025

(b) S-12(2) – TOS shall be earlier of 

i.e. 10^th Aug, 2025

12.2.1.1 Time limit for issue of tax invoice on supplying taxable goods

Example 1 – Supply involving movement of goods

Supplier: ABC Pvt Ltd (Registered under GST)

Buyer: XYZ Traders

Goods dispatched from Delhi to Mumbai

Goods removed from factory: 10th August 2025

Invoice issued: 12th August 2025

Analysis:

Since this supply involves movement, invoice should be issued before or at the time of removal, i.e. on or before 10th August 2025.

✅ Correct invoice date: 10th August 2025 (latest)

❌ Issuing on 12th August 2025 is non-compliance (delayed invoice).

Example 2 – Supply not involving movement

Supplier installs a machine at customer’s premises in Delhi.

Goods are already lying at customer’s site.

Ownership is transferred on 15th September 2025 (no movement).

Invoice issued on 17th September 2025.

Analysis:

Since no movement of goods, invoice should be issued at the time of delivery/making available, i.e. 15th September 2025.

✅ Correct invoice date: 15th September 2025

❌ 17th September 2025 = delayed invoice.

12.2.1.2 Time limit for issue of tax invoice in case of continuous supply of goods

Example-1

M/s Steel Trade Ltd. has a contract with M/s BuildInfra Ltd. to supply steel rods continuously over six months.

The contract provides that:

(a) Steel will be supplied daily as per site requirement.

(b) A monthly statement will be prepared for quantity delivered.

(c) Payment will be made within 10 days after each month’s statement.

Analysis

✅ Hence, invoices must be issued before or at the time of issuance of each monthly statement, even if payment comes later.

12.2.1.3 Time limit for issue of tax invoice on goods sent on approval for sale or return basis

Example 1 – Goods Approved Within 6 Months

M/s Fashion Wear sends garments worth ₹5,00,000 to a retailer, M/s Style Mart, on 1st January 2025, on approval basis (no invoice yet).

The agreement says: retailer will confirm approval within 3 months.

On 15th March 2025, Style Mart approves and decides to buy.

Analysis

Since approval is given on 15 March 2025 (within 6 months),

 → M/s Fashion Wear must issue tax invoice on or before 15 March 2025.

✅ Invoice timing: At the time of approval (actual sale date).

✅ Supply date: 15 March 2025.

Example 2 – No Approval Even After 6 Months

M/s Smart Electronics sends 10 laptops worth ₹8,00,000 to M/s Tech Bazaar on 1st January 2025 on approval basis.

No decision (approve or return) till 1st July 2025.

Analysis

After 6 months (on 30 June 2025), supply is deemed to have been made.

M/s Smart Electronics must issue invoice on or before 30 June 2025, even if Tech Bazaar has not yet confirmed purchase.

✅ Invoice timing: On or before 30 June 2025 (6 months from dispatch).

✅ Supply deemed date: 30 June 2025.

12.2.2 No Tax payable on advances received on supply of goods

Example 1

M/s ABC Traders received an advance of ₹1,00,000 on 10th Nov 2017 for goods to be supplied later.

Goods supplied and invoice issued on 25th Nov 2017.

(a) Situation (before Notification 66/2017):

S-12(2) – TOS shall be earlier of 

Therefore, TOS = 10th Nov 2017

(b) Situation (After Notification 66/2017):

TOS = Date of invoice or Last date for issue of invoice u/s 31 = 25th Nov 2017

12.3 TOS of goods taxable under Reverse Charge

Example-1

The goods are taxable under reverse charge.

12.4.1 TOS on supply of Voucher

Example 1: Supply Identifiable

ABC Retail Store issues a voucher worth ₹1,000 for a specific watch model.

The voucher is issued on 1st July 2025.

The customer redeems it on 15th August 2025.

Time of Supply: 1st July 2025 (date of issue)

Because the supply (specific watch) is identifiable when the voucher was issued.

Example 2: Supply Not Identifiable

XYZ Store issues a ₹1,000 gift voucher that can be used to buy any item in the store.

Voucher issued on 1st July 2025.

Customer redeems it on 20th September 2025 for a shirt.

Time of Supply: 20th September 2025 (date of redemption)

Because it was not known at issue which goods would be supplied.

12.5 TOS in residual cases

Example 1 – Supply not determinable under any other subsection

A government department makes a one-time supply of goods to a PSU, but no proper invoice or voucher is issued, and the supply date cannot be clearly identified.

The department files its GSTR-3B for that period on 20th November 2025.

Time of Supply = 20th November 2025 (date when periodical return is to be filed).

12.6 TOS for additional value by way of interest, late fees, penalty = Date of receipts of additional amount

Example-1

A Ltd. sold goods to B Ltd. on 6th June with a condition that interest @ 2% per month will be charged if B Ltd. failed to make payment within 15 days of the delivery of the goods.

Goods were delivered as also the invoice was issued on 6th June. B Ltd. paid the consideration for the goods on 6th July along with applicable interest.

TOS for the goods sold is the date of issue of invoice, i.e. 6th June and the

TOS for addition in value by way of interest is the date when such addition in value is received by A Ltd., i.e. 6th July.

Example 2 – Interest on delayed payment

Mr. A sold goods worth ₹1,00,000 to Mr. B on 1st July 2025.

Payment was due within 30 days (i.e., by 31st July 2025).

Mr. B delays payment and finally pays the amount on 31st August 2025 along with interest of ₹2,000.

Time of Supply:

(a) For goods = governed by Section 12(2) (say, 1st July 2025 or invoice date).

(b) For interest = governed by Section 12(6) → Date of receipt of interest (31st August 2025).

GST implication:

GST on ₹1,00,000 – at time of supply under 12(2).

GST on ₹2,000 – at time of receipt (31st Aug 2025) under 12(6).