The Goods and Services Tax (GST) framework operates on the principle of “time of supply” — the specific date on which a taxable event occurs for charging GST. Usually:
- Section 12 governs time of supply for goods.
- Section 13 governs time of supply for services.
However, when there is a change in the GST rate, applying Sections 12 and 13 directly could cause confusion because:
- The supply, invoice, and payment may fall in different periods (before and after the rate change).
- Without special rules, there would be disputes over which rate should apply.
Section 14 of the CGST Act, 2017 was introduced to remove this ambiguity.
It lays down special provisions to determine the time of supply when the GST rate changes, ensuring:
- Correct tax rate application.
- Uniform treatment for taxpayers.
- Prevention of misuse by manipulating invoice or payment dates.
Understand Before Applying Section 14
Before applying these rules, you must identify:
- Date of Supply – When the goods or services are actually supplied.
- Date of Invoice – When the tax invoice is issued.
- Date of Payment Receipt – As per law, this is:
- The date when the payment is entered in the supplier’s books of account, or
- The date when the payment is credited to the supplier’s bank account, whichever is earlier.
- Date of Rate Change – Official date from when the new GST rate comes into effect.
Also, a special proviso applies:
If the payment is credited to the bank account after four working days from the date of change in the rate, then the actual date of credit in the bank account will be considered as the date of receipt of payment.
Rules Under Section 14 – Step-by-Step
The section covers two major scenarios:
(a) Supply before the change in tax rate
(b) Supply after the change in tax rate
- Supply Made Before the Change in Tax Rate
Here, goods/services are actually supplied before the rate change, but invoice and payment may occur before/after.
(i) Invoice issued & payment received after the rate change
- Time of Supply = Earlier of:
- Date of invoice
- Date of receipt of payment
- Impact: New GST rate will apply because both events happened after rate change.
(ii) Invoice issued before rate change, payment received after rate change
- Time of Supply = Date of invoice
- Impact: Old GST rate will apply because the invoice date is before the rate change.
(iii) Payment received before rate change, invoice issued after rate change
- Time of Supply = Date of receipt of payment
- Impact: Old GST rate will apply because payment date is before rate change.
sIf goods/services are supplied before the rate change, time of supply is determined as follows:
| Case | Invoice Date | Payment Date | Time of Supply | GST Rate Applied |
| (a)(i) | After rate change | After rate change | Earlier of invoice or payment date | New rate |
| (a)(ii) | Before rate change | After rate change | Invoice date | Old rate |
| (a)(iii) | After rate change | Before rate change | Payment date | Old rate |
- Supply Made After the Change in Tax Rate
Here, goods/services are actually supplied after the rate change.
(i) Payment received after rate change, invoice issued before rate change
- Time of Supply = Date of receipt of payment
- Impact: New GST rate will apply because payment date is after the change.
(ii) Invoice issued & payment received before rate change
- Time of Supply = Earlier of:
- Date of invoice
- Date of payment
- Impact: Old GST rate will apply because both events happened before change.
(iii) Invoice issued after rate change, payment received before rate change
- Time of Supply = Date of invoice
- Impact: New GST rate will apply because invoice date is after change.
If goods/services are supplied after the rate change:
| Case | Invoice Date | Payment Date | Time of Supply | GST Rate Applied |
| (b)(i) | Before rate change | After rate change | Payment date | New rate |
| (b)(ii) | Before rate change | Before rate change | Earlier of invoice or payment date | Old rate |
| (b)(iii) | After rate change | Before rate change | Invoice date | New rate |
Proviso on Date of Receipt of Payment
If the payment is credited to the supplier’s bank account more than 4 working days after the date of rate change, then the actual credit date will be considered as the date of receipt of payment.
This prevents taxpayers from back-dating payments to take advantage of a lower rate.
Practical Examples
Example 1 – Supply before rate change
- Rate change date: 1st Oct 2025 (from 12% to 18%)
- Supply date: 28th Sep 2025
- Invoice date: 3rd Oct 2025
- Payment date: 4th Oct 2025
- Rule applicable: Clause (a)(i) – Supply before rate change, invoice & payment after rate change.
- Result: Time of supply = 3rd Oct 2025 (earlier of invoice/payment) → 18% GST applies.
Example 2 – Supply after rate change
- Rate change date: 1st Oct 2025 (from 12% to 18%)
- Supply date: 5th Oct 2025
- Invoice date: 25th Sep 2025
- Payment date: 10th Oct 2025
- Rule applicable: Clause (b)(i) – Supply after rate change, invoice before rate change, payment after rate change.
- Result: Time of supply = 10th Oct 2025 (payment date) → 18% GST applies.
Effect of 4 Working Days Rule
- Rate Change Date: 1 Dec 2025
- Payment Entered in Books: 28 Nov 2025
Bank Credit Date: 8 Dec 2025 (after 4 working days from rate change)
Impact: Actual credit date (8 Dec) will be considered for time of supply. If supply is after rate change, new rate applies.