Site navigation

The GST rate on a product rises from 5% to 18% with effect from 1 September 2026. The supplier issues the invoice on 31 August, delivers the goods on 2 September, and receives payment on 4…

Question and options

The GST rate on a product rises from 5% to 18% with effect from 1 September 2026. The supplier issues the invoice on 31 August, delivers the goods on 2 September, and receives payment on 4 September, entering it in its books and bank account that day. Under section 14 of the CGST Act, 2017, which date is the time of supply that decides the applicable rate?

  1. 4 September, the date of receipt of payment

  2. 1 September, the date the new rate took effect

  3. 2 September, the date the goods were supplied

  4. 31 August, the date of issue of the invoice

Answer and explanation

Correct answer: A - 4 September, the date of receipt of payment

Where goods are supplied after a rate change, the invoice is issued before it and payment is received after it, section 14(b)(i) of the CGST Act, 2017 fixes the time of supply at the date of receipt of payment, so the new 18% rate applies. The invoice date governs only where supply occurs before the change and the invoice precedes it (section 14(a)(ii)), or where supply is after the change and the invoice follows it with payment earlier (section 14(b)(iii)). The date of the change itself is never the time of supply.

Practice for these exams

Related exam syllabi

More solved explanations in GST - levy, supply, input tax credit, registration & returns