Continuous Supply of Goods – GST

Continuous supply of goods is a type of a supply, provided under a contract for a period of more than three months, on a continuous or recurrent basis. Supplies may be provided by means of a wire, cable, pipeline, or other conduit (this is just an illustration on the scheme of things, supplies can be made through any means). The Government has the privilege to notify certain supplies to be continuous. GST invoices, in these cases can be raised on a periodical basis. A few examples of “Continuous supply” can be supply of bricks for construction, security service, supply of ten-liter water cans on a weekly basis, annual maintenance contract, or telecom and internet services.

Time Limit for Issue of Invoice

Invoices are produced on a periodical basis, but for transaction that involve continuous supply of goods, the GST Act also specifies a time limit for issuing invoice. Hence, an invoice for continous supply of goods must be issued before the expiry of the time limit as specified below:

When Due Date is Mentioned in the Contract

In some types of contract for continous supply, like supply of internet, electricity, etc., the due date for payment would be fixed in a contract. In such cases, the invoice must be issued on or before the due date of payment.

When Due Date is Not Mentioned in Contract

If the due date of payment is not mentioned in the contract, the invoice must be issued before or at the time when supplier of service receives payment.

Completion of an Event

If the payment is linked to the completion of an event, the invoice should be issued on or before the date of completion of that event.

General Invoice Rules

Invoices, as per the general dictum, must be produced within a period of 30 days from the date of supply, and forty five days in case of a bank, or a non-banking financial institution. This is also applicable here, except that it varies from transaction to transaction, as witnessed above. Whatever the differences, invoices are generally produced within the prescribed time limit.

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