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Outbyte Driver Updater FREEScan for outdated or missing drivers - takes under a minuteDriver Scan →Outbyte PC Repair FREERepair Windows errors before they cause bigger problemsFix Now →Do not choose the GST rate from the invoice date alone. First identify the official rate notification and its effective date for the exact goods or services. Then establish whether the supply happened before or after that date and apply the appropriate branch of section 14 of the Central Goods and Services Tax (CGST) Act using the invoice date and the statutory payment-receipt date. Keep evidence for all three dates: supply, invoice issuance and payment receipt.
This method is for Indian GST transactions. The applicable percentage still depends on the product or service classification and the specific notification in force; the transition rules below do not identify a rate for an unspecified item.
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Why the invoice date is not enough
A GST rate change creates a timing problem because a transaction can have several relevant dates. The goods may be dispatched or the service performed before the change, the invoice may be issued afterward, and payment may be received on yet another date. Section 14 of the CGST Act provides a special time-of-supply rule for that situation, overriding the ordinary section 12 or section 13 rules where the rate changes.
The first question is therefore not “When was the invoice issued?” It is:
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- What notification changed the rate?
- When did that notification become effective?
- When did the supply occur?
- When was the invoice issued?
- When is payment treated as received under the Act?
Only after those facts are established can you determine which rate applies. A later invoice does not automatically move a pre-change supply to the new rate, and an earlier invoice does not automatically preserve the old rate for a post-change supply.
Step 1: Identify the exact rate notification
Locate the official rate notification for the relevant goods or services, normally through the Central Board of Indirect Taxes and Customs (CBIC) publications. Confirm all of the following before applying a transition rule:
- The tariff heading, service description or other classification covered by the notification.
- The old rate and the new rate, if both are stated.
- The precise effective date and, where relevant, the time from which the change operates.
- Any conditions, exemptions, geographic limits or industry-specific qualifications.
- Whether a later notification, corrigendum, circular or amendment modified the result.
Do not infer the effective date from a press report, a billing-system update or the date printed on an invoice. The notification governing the particular item controls. A transition example for one product, service or date cannot be generalized to another notification.
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Supply date
Determine when the taxable supply was made under the applicable goods or services rules. For goods, supporting evidence may include dispatch, delivery, acceptance or other records relevant to the transaction. For services, the contract, completion records, milestone acceptance and correspondence may be important. The decisive question for section 14 is whether the supply occurred before or after the rate-change effective date.
Invoice issue date
Record the date the tax invoice was actually issued, not merely the date it was drafted, uploaded to an accounting system or sent to a customer. Keep the original invoice, serial-number record and any evidence of transmission or receipt.
Payment-receipt date
Section 14 generally treats payment as received on the earlier of:
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- the date the payment is entered in the supplier’s books; or
- the date the amount is credited to the supplier’s bank account.
There is an important proviso: if the bank credit occurs more than four working days after the rate change, the bank-credit date applies. Apply the enacted wording to the transaction facts and preserve both the books and bank evidence. A customer’s promise to pay, an undeposited cheque or an internal receivable entry is not automatically the statutory payment-receipt date.
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One free scan finds every outdated or missing driver and matches the right update for your exact hardware.Free scan · exact hardware matchSection 14 decision matrix
Once the effective date and the three transaction dates are known, choose the branch based on when the supply occurred. “Before” and “after” in the table refer to the effective date in the official notification.
| Supply timing | Invoice timing | Payment receipt timing | Time of supply under section 14 |
|---|---|---|---|
| Before the change | After the change | After the change | Earlier of payment receipt and invoice issue |
| Before the change | Before the change | After the change | Invoice issue date |
| Before the change | After the change | Before the change | Payment-receipt date |
| After the change | Before the change | After the change | Payment-receipt date |
| After the change | Before the change | Before the change | Earlier of payment receipt and invoice issue |
| After the change | After the change | Before the change | Invoice issue date |
The table identifies the statutory time of supply for the transition. You still need the notification’s classification and rate to convert that result into the tax amount on the invoice or adjustment document.
How to apply the matrix in practice
- Write down the effective date. Use the date in the official rate notification for the exact goods or services. Do not substitute the date on a government press release unless the notification itself uses that date.
- Classify the supply. Check the product heading, service code or description against the notification. If the classification is uncertain, resolve it before calculating tax; a correct transition analysis cannot cure a wrong classification.
- Prove when the supply occurred. Assemble delivery, dispatch, completion, acceptance, milestone or other records that establish the supply date under the applicable rules.
- Prove when the invoice was issued. Use the final invoice and the accounting or e-invoicing audit trail. A draft or pro-forma document does not necessarily satisfy the tax-invoice requirement.
- Calculate the statutory payment-receipt date. Compare the supplier’s book-entry date with the bank-credit date, then check the four-working-day proviso.
- Select section 14(a) or 14(b). Use section 14(a) when the supply was before the change and section 14(b) when it was after the change. Do not mix rows from the two branches.
- Determine the applicable rate. Apply the old or new rate associated with the resulting time of supply, subject to the notification’s own conditions and any later amendment.
- Document the conclusion. Record the notification number and effective date, classification, three dates, payment evidence, selected row and the resulting rate. This makes the decision reviewable if the customer, auditor or tax officer asks why that rate was used.
Worked timing examples
Pre-change supply, late invoice and late payment
Assume a notification becomes effective on 1 October. The supply occurs on 28 September, the invoice is issued on 4 October and payment is received on 12 October. Both invoice and payment are after the change, while the supply is before it. Under section 14(a), the time of supply is the earlier of 4 October and 12 October: 4 October. The applicable rate is then determined from the notification and the law attached to that time of supply.
Pre-change supply, pre-change invoice and post-change payment
Using the same 1 October effective date, suppose the supply and invoice are both dated 28 September, but payment is received on 10 October. For a pre-change supply with the invoice before the change and payment after it, section 14(a) uses the invoice issue date. The later receipt does not, by itself, move the time of supply to 10 October.
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Suppose an advance is received on 29 September, the supply is completed on 30 September and the invoice is issued on 3 October. Payment was received before the change and the invoice after it. For a pre-change supply, section 14(a) uses the payment-receipt date. Preserve the bank-credit and book-entry records proving when the advance was received.
Post-change supply, pre-change invoice and post-change payment
If the supply occurs on 3 October, an invoice was issued on 29 September and payment is received on 8 October, the supply is post-change. Section 14(b) uses the payment-receipt date in this combination. The fact that the invoice was issued before 1 October is not sufficient to retain the earlier rate.
Post-change supply, invoice and payment both before the change
If the supply is on 3 October but both invoice and payment were completed before 1 October, section 14(b) uses the earlier of the payment-receipt date and invoice issue date. The transaction file should explain how a post-change supply had legitimately reached those pre-change invoicing and payment events.
Post-change supply, payment before the change and invoice after it
If payment is received on 29 September, the supply occurs on 3 October and the invoice is issued on 5 October, section 14(b) uses the invoice issue date. The advance date alone does not settle the result for a post-change supply.
Advances: what to verify before deciding the rate
An advance can be the event that determines the time of supply in one row of the matrix, but not in every row. Start by establishing whether the underlying supply was before or after the effective date. Then determine whether the advance is a payment receipt under the statutory definition, rather than relying on a customer’s remittance advice or an unverified ledger note.
For an advance credited to the bank, retain the bank statement, transaction reference and the date the supplier entered it in its books. If those dates differ, apply the earlier-date rule unless the four-working-day proviso changes the result. If the payment is received through a payment gateway, clearing arrangement or intermediary, identify the date on which the amount was credited to the supplier’s bank and the date it was recorded in the books.
Where an advance is refunded, adjusted or split across supplies, preserve the allocation and adjustment trail. The transition analysis must still be performed for the particular supply and payment combination; a general customer-account balance is not enough.
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Invoice deadlines are a separate compliance question
Section 14 determines the transition time of supply, but invoice-issuance deadlines must be checked separately. Under the cited CBIC invoice rules, the general deadline for a taxable service is 30 days from the relevant supply, while specified insurers, banking companies, financial institutions and non-banking financial companies have a 45-day period. Additional provisions apply to certain supplies between distinct persons and other specified transactions.
These deadlines do not authorize an invoice to be backdated or allow a supplier to ignore the rate notification. A late invoice can create a compliance issue even when section 14 identifies the rate correctly. Check the rule applicable to the actual supplier and transaction category, and retain evidence of when the invoice was issued.
Records to keep in a transition-date file
- The complete rate notification, including its effective date and conditions.
- The classification analysis linking the goods or service to that notification.
- Purchase orders, contracts, dispatch documents, delivery acknowledgements, service-completion records and acceptance evidence.
- The original invoice, serial-number sequence and e-invoice or accounting audit trail where applicable.
- Bank statements, payment advices, receipts, book-entry reports and reconciliation showing the payment-receipt date.
- A short written calculation identifying section 14(a) or 14(b), the selected matrix row and the resulting rate.
- Credit notes, debit notes, refunds or reallocations connected with the transaction.
Keep the documents together rather than storing the notification in one system and the payment evidence in another. The defensibility of the conclusion depends on being able to connect the classification, effective date and three transaction dates.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Common mistakes and how to correct them
Using only the invoice date
Problem: The invoice is dated after the change, so the new rate is applied automatically. Correction: Establish supply timing first and then use the correct section 14 branch.
Using the customer’s payment date without checking statutory receipt
Problem: A remittance email or cheque date is treated as the payment-receipt date. Correction: Compare the supplier’s book-entry date and bank-credit date and test the four-working-day proviso.
Applying the wrong branch
Problem: The pre-change row is used because an advance was received before the change, even though the supply was after it. Correction: Select section 14(a) or 14(b) solely from the supply date before choosing a row.
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Assuming a press announcement establishes the rate
Problem: A published summary is used without checking the product or service classification and notification. Correction: obtain the official notification and verify subsequent amendments or clarifications.
Ignoring invoice-rule deadlines
Problem: The transition rate is correct but the invoice was issued outside the applicable statutory period. Correction: perform a separate invoice-timing check for the supplier and transaction type.
What the 22 September 2025 example does—and does not—prove
Government transition FAQ material discussed a rate change effective 22 September 2025 and directed readers to section 14 when supplies, invoices and payments fell on different sides of that date. It is a useful illustration of the decision method, not a substitute for the notification governing another transaction.
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A related government press note stated that e-way bills issued before that change remained valid for their full duration and that goods already moving under a valid e-way bill did not require a fresh e-way bill after 22 September 2025. That instruction is date-specific. Do not treat it as a universal rule for every future rate change; check the instructions issued for the transition you are handling.
When the answer remains uncertain
Escalate the transaction for tax advice when the classification is disputed, the supply date is split across milestones, the payment passed through several accounts, the bank-credit date is more than four working days after the change, or the notification contains conditions that are not clearly met. Provide the adviser with the notification, contract, supply evidence, invoice trail and payment records. A conclusion based on a single date or a screenshot of a billing system is unlikely to be adequate for a complex transition.
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