Section 13 of the Central Goods and Services Tax (CGST) Act, 2017 deals with the time of supply of services. It is an important provision because it determines the point at which the liability to pay GST on a taxable service arises.
In simple terms, the time of supply tells a taxpayer when GST liability is triggered and in which tax period the service should generally be accounted for.
Section 13 provides different rules for normal supplies of services, supplies where GST is payable under the Reverse Charge Mechanism (RCM), situations where the time of supply cannot otherwise be determined, and additional amounts such as interest, late fee or penalty received for delayed payment.
The current provisions also include an important amendment relating to RCM invoices issued by the recipient and the omission of the earlier voucher-specific provision with effect from 1 October 2025.
What is Section 13 of the CGST Act?
Section 13 is titled “Time of Supply of Services.”
The provision establishes when the liability to pay GST on services arises.
Section 13 is particularly important because services are different from goods. A service may be provided over a period of time, invoices may be issued later, and payment may be received before or after the service is provided.
Therefore, the law provides specific rules to determine the correct time of supply.
The basic structure of Section 13 covers:
- Normal supply of services
- Reverse charge supplies
- Special treatment for associated enterprises where the supplier is outside India
- Cases where the time of supply cannot otherwise be determined
- Additional amounts such as interest, late fee or penalty
- The effect of the removal of the earlier voucher-specific time-of-supply provision
Section 13(1) – Liability to Pay Tax on Services
Section 13(1) provides the basic rule that the liability to pay tax on services arises at the time of supply, as determined under the provisions of Section 13.
This means that GST liability is not determined merely by looking at the date on which payment is received.
The taxpayer has to apply the appropriate time-of-supply rule based on the nature of the transaction.
Section 13(2) – Time of Supply for Normal Services
Section 13(2) provides the general rule for determining the time of supply of services.
For a normal taxable supply of services, the time of supply is determined using the earliest applicable date under the following three situations:
- Date of issue of invoice, where the invoice is issued within the prescribed period, or the date of receipt of payment, whichever is earlier.
- Date of provision of service, where the invoice is not issued within the prescribed period, or the date of receipt of payment, whichever is earlier.
- Date on which the recipient records the receipt of services in their books of account, where the first two situations do not apply.
Therefore, Section 13(2) requires the taxpayer to first determine whether the invoice was issued within the prescribed period.
Section 13(2)(a) – Invoice Issued Within the Prescribed Period
Where the supplier issues the invoice within the period prescribed under Section 31, the time of supply is the earlier of:
- Date of issue of invoice, or
- Date of receipt of payment.
Example
Suppose a consultant completes a service on 10 April.
The invoice is issued on 15 April within the prescribed period.
The payment is received on 25 April.
The relevant dates are:
- Invoice: 15 April
- Payment: 25 April
The earlier date is 15 April.
Therefore, the time of supply would generally be 15 April.
Section 13(2)(b) – Invoice Not Issued Within the Prescribed Period
If the supplier does not issue the invoice within the prescribed period, Section 13(2)(b) becomes relevant.
In such a situation, the time of supply is the earlier of:
- Date of provision of service, or
- Date of receipt of payment.
Example
Suppose a service is provided on 10 June.
The invoice should have been issued within the prescribed period but was issued late on 20 July.
Payment was received on 25 June.
The relevant dates under Section 13(2)(b) are:
- Date of provision of service: 10 June
- Date of payment: 25 June
The earlier date is 10 June.
Therefore, the time of supply would generally be 10 June.
Section 13(2)(c) – When the Other Rules Do Not Apply
Section 13(2)(c) provides a further rule.
Where neither clause (a) nor clause (b) applies, the time of supply becomes the date on which the recipient shows the receipt of services in their books of account.
This works as a further mechanism for determining the time of supply where the normal invoice and service-provision rules do not determine it.
₹1,000 Excess Payment Provision
Section 13(2) also contains a proviso concerning an amount received by the supplier in excess of the amount indicated in the invoice.
Where the supplier of taxable services receives an amount up to ₹1,000 in excess of the amount indicated in the invoice, the supplier has the option to treat the date of issue of the invoice as the time of supply to the extent of that excess amount.
Example
Suppose an invoice shows ₹10,000, but the supplier receives ₹10,500.
The excess amount is ₹500.
Since the excess is within ₹1,000, the supplier may exercise the option provided by Section 13(2) for determining the time of supply relating to that excess amount.
Date of Receipt of Payment
The concept of the date of receipt of payment is important while applying Section 13(2).
The CGST framework generally determines the date of receipt of payment by reference to the date on which the payment is entered in the supplier’s books of account or the date on which the payment is credited to the supplier’s bank account, whichever is earlier.
This prevents uncertainty regarding the exact date on which payment is considered received for time-of-supply purposes.
Section 13(3) – Time of Supply Under Reverse Charge
Section 13(3) deals with services where GST is paid or is liable to be paid under the Reverse Charge Mechanism.
Under RCM, the recipient is responsible for paying GST in the cases covered by the applicable provisions.
The time of supply under Section 13(3) is generally the earliest of the dates specified in the provision.
The current provision covers:
- Date of payment as entered in the recipient’s books or the date payment is debited from the recipient’s bank account, whichever is earlier;
- The date immediately following 60 days from the date of issue of the invoice or other relevant document by the supplier, where the invoice is required to be issued by the supplier; or
- The date of issue of invoice by the recipient, where the invoice is required to be issued by the recipient.
The third situation was introduced to address cases where the recipient is required to issue the invoice for an RCM supply.
Section 13(3)(a) – Date of Payment Under RCM
The first relevant date under Section 13(3) is the payment date.
For this purpose, the earlier of the following is considered:
- Date on which the payment is entered in the recipient’s books of account, or
- Date on which the payment is debited from the recipient’s bank account.
Example
Suppose:
- Payment recorded in books: 10 August
- Payment debited from bank account: 12 August
The earlier date is 10 August.
Therefore, 10 August becomes the relevant payment date under Section 13(3)(a).
Section 13(3)(b) – 60-Day Rule Under RCM
The second relevant date under Section 13(3) is the date immediately following 60 days from the date of issue of the invoice or other relevant document by the supplier, where the supplier is required to issue the invoice.
This is commonly referred to as the 60-day rule for services under RCM.
Example
Suppose the supplier issues an invoice on 1 June.
Sixty days from the invoice date ends on 31 July.
The date immediately following those 60 days is 1 August.
If the payment date is later than this and no earlier applicable date determines the time of supply, the 60-day rule can become relevant.
Section 13(3)(c) – Invoice Issued by the Recipient
This is an important change in the current law.
In certain RCM situations, the recipient is required to issue the invoice instead of the supplier.
Section 13(3)(c) provides that, where the invoice is required to be issued by the recipient, the relevant time of supply is the date of issue of the invoice by the recipient.
This provision was introduced through the Finance (No. 2) Act, 2024 and became effective from 1 November 2024.
Why Was This Amendment Required?
The GST Council had identified an issue where Section 13(3) referred to the supplier’s invoice, while certain RCM transactions required the recipient to issue the invoice.
The amendment specifically addressed this situation by introducing a separate clause for invoices issued by the recipient.
What Happens If the Time of Supply Cannot Be Determined Under Section 13(3)?
Section 13(3) contains a proviso for situations where the time of supply cannot be determined under the specified clauses.
In such a case, the time of supply becomes the date of entry in the books of account of the recipient of the supply.
This acts as a fallback rule for RCM supplies.
Special Rule for Associated Enterprises Located Outside India
Section 13(3) contains another important provision relating to supplies by associated enterprises where the supplier of services is located outside India.
In such a case, the time of supply is the earlier of:
- Date of entry in the books of account of the recipient, or
- Date of payment.
This is a special rule because cross-border transactions involving associated enterprises require a specific mechanism for determining when the service becomes taxable.
Section 13(4) – Voucher Provision Omitted
The earlier Section 13(4) contained a specific rule for determining the time of supply in the case of vouchers.
Under the old provision:
- If the supply was identifiable at the time of issue of the voucher, the time of supply was the date of issue of the voucher.
- In other cases, the time of supply was the date of redemption of the voucher.
However, this provision has been omitted with effect from 1 October 2025 by the Finance Act (No. 7 of 2025).
Therefore, current articles and study material should not present the old Section 13(4) voucher rule as an operative provision.
The omission means that the earlier special time-of-supply rule for vouchers is no longer part of the current Section 13.
Section 13(5) – Residual Rule
Section 13(5) provides a fallback mechanism.
Where it is not possible to determine the time of supply under the applicable provisions of:
- Section 13(2),
- Section 13(3), or
- Section 13(4),
the time of supply is determined as follows:
Where a Periodical Return Is Required
The time of supply is the date on which the return is required to be filed.
In Other Cases
The time of supply is the date on which the tax is paid.
This provision helps determine the time of supply when the normal rules do not provide a clear answer.
Section 13(6) – Interest, Late Fee or Penalty
Section 13(6) deals with additions to the value of supply in the form of:
- Interest
- Late fee
- Penalty
where the additional amount relates to delayed payment of consideration.
The time of supply for such additional value is the date on which the supplier receives the additional amount.
Example
A customer is required to pay ₹50,000 for a service but makes the payment after the agreed due date.
The supplier receives ₹2,000 as interest for the delay.
The time of supply for this additional ₹2,000 is the date on which the supplier receives the interest amount.
Time of Supply for Continuous Supply of Services
Continuous supply of services requires careful consideration because services may be provided continuously or over a period of time.
Section 31 contains specific invoice rules for continuous supply of services.
For example, where the due date of payment is ascertainable from the contract, the invoice is required to be issued on or before the due date of payment.
Where payment is linked to completion of an event or another specified milestone, the invoice rules are applied according to the relevant circumstances.
Therefore, Section 13 should be read together with the invoice provisions under Section 31 when determining the time of supply for continuous services.
The GST Council has also issued clarifications concerning time of supply in specific continuous-supply situations, including spectrum allotment involving instalment payments.
Example of Normal Supply of Services
Suppose a digital marketing agency provides services to a business.
The service is completed on 5 September.
The invoice is issued on 15 September within the prescribed period.
Payment is received on 30 September.
The relevant dates are:
- Service provided: 5 September
- Invoice issued: 15 September
- Payment received: 30 September
Because the invoice was issued within the prescribed period, Section 13(2)(a) applies.
The earlier of the invoice date and payment date is 15 September.
Therefore, 15 September would generally be the time of supply.
Example Where Invoice Is Issued Late
Suppose a consultant completes a service on 10 October.
The invoice is not issued within the prescribed period and is issued later on 25 November.
Payment is received on 20 October.
Under Section 13(2)(b), the relevant dates are:
- Date of provision of service: 10 October
- Date of payment: 20 October
The earlier date is 10 October.
Therefore, the time of supply would generally be 10 October.
Example of RCM Service
Suppose a service is received under reverse charge.
The supplier issues the invoice on 1 January.
The recipient records payment in its books on 10 January.
The payment is debited from the bank account on 12 January.
Sixty days from the supplier’s invoice date ends on 2 March, making 3 March the date immediately following 60 days.
The relevant dates are:
- Payment date based on books/bank: 10 January
- 61st day from invoice: 3 March
The earlier date is 10 January.
Therefore, the time of supply would generally be 10 January, subject to the applicable RCM provisions.
Example Where Recipient Issues the Invoice
Suppose a particular RCM service is received from an unregistered supplier and the recipient is required to issue the invoice.
The recipient issues the invoice on 15 August.
If the payment date and other applicable dates do not result in an earlier time of supply, the date of issue of the recipient’s invoice becomes relevant under Section 13(3)(c).
This provision is particularly important after the amendment effective from 1 November 2024.
Section 13 and Section 31 – Why Both Matter
Section 13 determines the time of supply of services, while Section 31 deals with the issue of tax invoices.
These two provisions are closely connected.
Section 13(2) specifically refers to whether the invoice has been issued within the period prescribed under Section 31.
Therefore, a taxpayer cannot correctly determine the time of supply in every case simply by looking at the date printed on an invoice.
The taxpayer may also need to determine whether the invoice was issued within the legally prescribed period.
Section 13 and Advance Payment for Services
The receipt of payment is one of the dates considered under Section 13(2).
Therefore, payment received before completion of a service can become relevant for determining the time of supply, depending on the applicable circumstances.
This is different from the treatment of advances for goods, for which separate relief has been provided through notification.
Businesses providing services should therefore carefully examine the timing of:
- Advance receipt
- Service provision
- Invoice issuance
- Final payment
when determining GST liability.
Why Is Time of Supply Important?
The time of supply is important because it helps determine the period in which GST liability arises.
Correct determination helps businesses:
- Identify the correct tax period
- Report taxable services correctly
- Pay GST within the applicable timeline
- Apply the appropriate tax rate where required
- Maintain proper accounting records
- Calculate interest correctly in case of delayed payment
- Avoid disputes relating to the timing of GST liability
An incorrect time of supply can result in GST being reported in the wrong period.
Section 13 and Change in GST Rate
Section 13 should also be read along with Section 14 of the CGST Act, which contains special rules for determining the time of supply where there is a change in the rate of tax.
Section 14 applies notwithstanding Sections 12 and 13 and provides separate rules depending on:
- Whether the service was supplied before or after the rate change
- When the invoice was issued
- When payment was received
Therefore, if the GST rate changes around the time of a transaction, simply applying Section 13(2) may not be sufficient. Section 14 must also be examined.
Important Points About Section 13
The major points of Section 13 of the CGST Act can be summarized as follows:
- Section 13 deals with the time of supply of services.
- GST liability on services arises at the time of supply determined under Section 13.
- Section 13(2) provides the general rule for normal supplies of services.
- Where the invoice is issued within the prescribed period, the earlier of invoice date or payment date is generally relevant.
- Where the invoice is not issued within the prescribed period, the earlier of service provision date or payment date is generally relevant.
- Where the first two rules do not apply, the recipient’s book-entry date can become relevant.
- A special proviso deals with an excess payment of up to ₹1,000 over the invoice amount.
- Section 13(3) deals with services taxable under the Reverse Charge Mechanism.
- Under RCM, the payment date and the 60-day invoice-related rule are important.
- From 1 November 2024, Section 13(3) also specifically covers cases where the recipient is required to issue the invoice.
- A special rule applies to supplies by associated enterprises where the supplier is located outside India.
- The earlier voucher-specific provision under Section 13(4) was omitted with effect from 1 October 2025.
- Section 13(5) provides a residual rule for cases where the time of supply cannot otherwise be determined.
- Section 13(6) deals with interest, late fee or penalty received for delayed payment of consideration.
- The time of supply for such additional amount is the date on which the supplier receives the amount.
- Section 13 should be read along with Section 31 and, where applicable, Section 14.
Conclusion
Section 13 of the CGST Act, 2017 provides the framework for determining the time of supply of services. It is an important provision because the time of supply determines when GST liability arises and helps identify the relevant tax period.
For normal services, Section 13(2) considers the timing of the invoice, provision of service and receipt of payment. For services covered under reverse charge, Section 13(3) provides separate rules based on payment, the 60-day period from the supplier’s invoice where applicable, and the date of invoice issued by the recipient in specified cases.
The current law also needs to be understood in light of recent amendments. The recipient-invoice provision under Section 13(3) became effective from 1 November 2024, while the earlier voucher-specific Section 13(4) was omitted with effect from 1 October 2025.
For correct GST compliance, businesses should determine the applicable time of supply carefully and read Section 13 together with the relevant invoice provisions under Section 31, change-in-rate provisions under Section 14, applicable notifications and the GST Rules.
Based on Google's Helpful Content System, this article emphasizes user value, transparency, and accuracy. It incorporates principles of E-E-A-T (Experience, Expertise, Authoritativeness, Trustworthiness).
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