Time of Issue of Invoice in Continuous Supply under GST

A continuous supply is a supply where goods or services are supplied on a recurring basis under a contract and payment for the supply is also made periodically.
For example: A contract for supply of mineral water to a company for 6 months, supply of housekeeping services to a company for a financial year, supply of broadband services, etc. Let us understand the meaning of continuous supply under GST and the time of issue of invoice in continuous supply of goods or services.
 

Continuous supply of goods
Continuous supply of goods is a supply of goods provided or agreed to be provided continuously or on recurring basis, under a contract, and for which the supplier invoices the recipient on a regular or periodic basis.

Continuous supply of services
Continuous supply of services is a supply of services which is provided or agreed to be provided continuously or on recurring basis, under a contract, for a period exceeding 3 months with periodic payment obligations.

Time of issue of invoice in continuous supply

Continuous supply of goods
In case of continuous supply of goods, invoice should be issued at the time when each payment is received by the supplier or statement of accounts is issued.

Continuous supply of services
In case of continuous supply of services, invoice should be issued:

1. Where the due date of payment is known in the contract- The invoice should be issued on or before the due date of payment.
2. Where the due date of payment is not known in the contract- The invoice should be issued before or at the time when the supplier receives the payment.
3. Where the payment is linked to the completion of an event- The invoice should be issued on or before the date of completion of the event. For example: A works contract for construction of a building, where payment will be made on completion of each stage of construction. In this case, the invoice should be issued on or before each stage of construction is completed.

Hence, specific guidelines have been laid down under GST on the time of issue of invoice in continuous supply of goods and services.