Section 14 of the CGST Act, 2017 – Change in Rate of Tax

Layman Meaning

Section 14 applies when the GST rate changes (for example, from 18% to 12% or from 5% to 12%). It determines which GST rate will apply by deciding the Time of Supply based on three events:

1. Date of Supply
2. Date of Invoice
3. Date of Payment

This section overrides the normal Time of Supply provisions under Sections 12 and 13.

Easy Rule to Remember

Check any two of the three events (Supply, Invoice, Payment).

• If any two events occur before the rate change → Old GST Rate applies.
• If any two events occur after the rate change → New GST Rate applies.

Situation 1: Supply Before Change in GST Rate

Example

GST rate increased from 12% to 18% on 1 July.

• Goods supplied: 25 June
• Invoice issued: 28 June
• Payment received: 10 July

Since Supply and Invoice are before the rate change, 12% GST will apply.

Situation 2: Supply After Change in GST Rate

Example

GST rate increased from 12% to 18% on 1 July.

• Goods supplied: 5 July
• Invoice issued: 28 June
• Payment received: 25 June

Since Invoice and Payment are before the rate change, 12% GST will apply.

CA Practical Shortcut

"2 Before = Old Rate"

"2 After = New Rate"

Just remember the 2 out of 3 rule:

• Supply
• Invoice
• Payment

Whichever side (before or after rate change) has at least two events, that GST rate will apply.

One-Line Summary

Section 14 determines the applicable GST rate when the tax rate changes by considering the dates of supply, invoice, and payment. The side having any two of the three events decides whether the old rate or new rate applies.