Section 12
The section determines when GST liability arises on goods.
Key provision:
- GST becomes payable at the time of supply of goods.
- The time of supply is generally the earlier of:
- Date of issue of invoice (or last date on which invoice should have been issued), or
- Date of receipt of payment.
Formula (General Rule)
The time of supply is:
Earlier of (Invoice Date) or (Payment Receipt Date)
Other important provisions
- Separate rules exist for:
- Reverse charge supplies
- Vouchers
- Interest, late fee, or penalty for delayed payment
- Cases where the normal rule cannot determine the time of supply.
Example
- Invoice issued: 10 June
- Payment received: 15 June
Time of Supply = 10 June (earlier date)
Therefore, GST liability arises on 10 June.
If you were actually asking about Section 12 of the IGST Act (Place of Supply of Services), let me know and I can provide the complete clause-wise explanation from Section 12(1) to 12(14).
The content provided in this article is intended solely for educational and informational purposes and should not be construed as professional accounting, taxation, legal, or financial advice. Readers are advised to consult a qualified professional before making any financial, tax, legal, or business decisions based on the information contained herein.Disclaimer