Section 14 — Change in Rate of Tax | GST Act

1. What Section 14 does

Section 14 is the special time-of-supply rule that applies when the GST rate changes for a supply of goods, services or both.

Normally, Sections 12 and 13 determine the time of supply of goods and services. But when the applicable tax rate changes between the time the supply occurs and the time the invoice or payment occurs, simply applying the normal Section 12/13 rule may not tell you whether the old rate or new rate should apply.

Section 14 solves that problem by creating a special matrix based on three dates:

1. Supply date
Was the supply made before or after the rate changed?

2. Invoice date
Was the invoice issued before or after the rate changed?

3. Payment date
Was payment received before or after the rate changed?

Then apply Section 14
The statutory combination determines the time of supply and therefore the applicable rate.

Core principle: Section 14 is not a general “rate-change adjustment” provision. It is a special time-of-supply rule. First classify the supply as before or after the rate-change date; then examine invoice and payment timing.

India Code's current consolidated Act describes Section 14 as applying notwithstanding Sections 12 and 13 where there is a change in the rate of tax. citeturn0search24turn1search1

2. Complete statutory structure

Branch	Supply position	Sub-cases	Purpose
14(a)	Supply made before rate change	(i), (ii), (iii)	Determines the applicable time of supply where invoice/payment occur around the change.
14(b)	Supply made after rate change	(i), (ii), (iii)	Determines the applicable time of supply where invoice/payment straddle the change.
Proviso	Payment date	Bank-credit rule	Specially defines receipt of payment where bank credit occurs more than four working days after the rate change.
Explanation	Payment date	Books/bank	Generally treats the earlier of book entry and bank credit as receipt of payment, subject to the proviso.

There are exactly six core combinations: three where the supply is before the rate change and three where the supply is after the rate change.

3. Why Section 14 overrides Sections 12 and 13

Section 14 begins with a non-obstante clause: “Notwithstanding anything contained in section 12 or section 13”. This is legally significant.

It means that when the facts fall within a change in the rate of tax, the special Section 14 mechanism takes priority over the ordinary time-of-supply rules.

Normal situation	Special rate-change situation
Goods → Section 12	Section 14 applies where there is a rate change and its conditions are met.
Services → Section 13

For example, a construction service may ordinarily be tested under Section 13. If the GST rate changes between the service event, invoice and payment, Section 14 must be applied to determine the relevant time of supply for rate purposes.

Do not jump directly to “old rate/new rate”. Establish the supply date first. Section 14 has separate rules depending on whether the supply occurred before or after the rate-change date.

4. Supply made before the rate change — Section 14(a)

Assume the GST rate changes on 1 October. The supply occurred on 25 September. The supply is therefore classified as a pre-change supply.

Section 14(a) contains three possible combinations.

Question to ask first: Was the supply actually completed/provided before 1 October? If yes, enter the Section 14(a) branch.

5. Before + invoice after + payment after

Section 14(a)(i) applies where:

Event	Position
Supply	Before rate change
Invoice	After rate change
Payment	After rate change

In this situation, the time of supply is the earlier of the date of receipt of payment or the date of issue of invoice.

Example

Supply: 25 September. Rate changes: 1 October. Invoice: 5 October. Payment: 20 October. The relevant time of supply is the earlier of 5 October and 20 October — therefore 5 October.

Because the time of supply falls after the rate change, the new rate is generally the relevant rate for this Section 14 analysis.

Common mistake: Do not automatically apply the old rate merely because the physical/service supply happened before the rate change. Section 14(a)(i) specifically addresses this combination.

6. Before + invoice before + payment after

Section 14(a)(ii) applies where:

Event	Position
Supply	Before rate change
Invoice	Before rate change
Payment	After rate change

Here, the time of supply is the date of issue of the invoice.

Example

Supply: 25 September. Rate changes: 1 October. Invoice: 28 September. Payment: 15 October. Section 14(a)(ii) fixes the time of supply at 28 September.

Result: The invoice date falls before the rate change, so the old-rate time-of-supply position is established by Section 14(a)(ii), subject to the exact rate notification and facts.

7. Before + payment before + invoice after

Section 14(a)(iii) applies where:

Event	Position
Supply	Before rate change
Payment	Before rate change
Invoice	After rate change

The time of supply is the date of receipt of payment.

Example

Supply: 25 September. Payment: 28 September. Rate changes: 1 October. Invoice: 5 October. Section 14(a)(iii) fixes the time of supply at 28 September.

The fact that the invoice was issued after the rate change does not shift the time of supply because payment had already been received before the change.

8. Supply made after the rate change — Section 14(b)

Now assume the rate changes on 1 October and the supply occurs on 5 October. This is a post-change supply.

Section 14(b) contains three separate combinations. These are deliberately different from the pre-change branch because the underlying supply itself has occurred under the new-rate period.

First question remains the same: identify whether the supply occurred before or after the effective date of the rate change. Only then select the relevant sub-clause.

9. After + invoice before + payment after

Section 14(b)(i) applies where:

Event	Position
Supply	After rate change
Invoice	Before rate change
Payment	After rate change

The time of supply is the date of receipt of payment.

Example

Rate changes on 1 October. Invoice was issued on 28 September, supply occurs on 5 October and payment is received on 15 October. Section 14(b)(i) makes 15 October the time of supply.

Practical issue: This situation can arise where an invoice is issued before the rate change but the actual supply takes place after the new rate has become effective. Contract and supply evidence therefore become important.

10. After + invoice before + payment before

Section 14(b)(ii) applies where:

Event	Position
Supply	After rate change
Invoice	Before rate change
Payment	Before rate change

The time of supply is the earlier of the date of receipt of payment or the date of issue of invoice.

Example

Rate changes on 1 October. Invoice: 28 September. Payment: 30 September. Supply: 5 October. Section 14(b)(ii) compares 28 September and 30 September and selects the earlier date.

This is one of the clearest examples of why Section 14 cannot be applied merely by looking at the date on which the goods/services were finally supplied.

11. After + invoice after + payment before

Section 14(b)(iii) applies where:

Event	Position
Supply	After rate change
Invoice	After rate change
Payment	Before rate change

The time of supply is the date of issue of invoice.

Example

Rate changes on 1 October. Customer pays an advance on 28 September. Supply is made on 5 October. Invoice is issued on 10 October. Section 14(b)(iii) fixes the time of supply at 10 October.

Important: A payment before the rate change does not automatically mean the old rate applies. The exact Section 14 combination must be identified.

12. Special rule for the date of receipt of payment

The proviso to Section 14 contains an important payment-date rule.

Where the supplier's bank account is credited after four working days from the date of change in the rate of tax, the date of receipt of payment for this section is specifically treated as the date of credit in the bank account.

Normally, the explanation to Section 14 defines receipt of payment as the earlier of:

Books
Date payment is entered in supplier's books.

Bank
Date payment is credited to supplier's bank account.

The special proviso exists because payments around a rate-change date can otherwise create disputes about whether a book entry made before the change should control when the banking credit occurs materially later.

Illustration

Rate changes on Monday. The supplier records payment in its books before the change, but the bank account is credited more than four working days after the rate-change date. For Section 14, the statutory proviso requires the bank-credit date to be used as the date of receipt of payment.

Control: For rate-change transactions, retain both the bank statement and the accounting-entry evidence. Do not rely solely on the ledger date.

13. Complete six-case Section 14 matrix

Case	Supply	Invoice	Payment	Time of supply under Section 14
14(a)(i)	Before	After	After	Earlier of payment or invoice.
14(a)(ii)	Before	Before	After	Invoice date.
14(a)(iii)	Before	After	Before	Payment date.
14(b)(i)	After	Before	After	Payment date.
14(b)(ii)	After	Before	Before	Earlier of payment or invoice.
14(b)(iii)	After	After	Before	Invoice date.

Memorisation shortcut: Do not memorise isolated outcomes. Memorise the two branches — Supply Before and Supply After — and then test invoice/payment position against the three sub-clauses.

14. Detailed practical examples

Example 1 — service rate reduced from 18% to 12%

Assume the rate changes from 18% to 12% on 1 October. A service was supplied on 25 September, invoice issued on 5 October and payment received on 20 October. This is Section 14(a)(i). Time of supply is 5 October, the earlier of invoice and payment.

Example 2 — invoice before change

Supply occurs on 25 September, invoice on 28 September and payment on 15 October. This is Section 14(a)(ii). Time of supply is 28 September.

Example 3 — advance before change

Supply occurs on 25 September, payment is received on 28 September and invoice is issued on 5 October. This is Section 14(a)(iii). Time of supply is 28 September.

Example 4 — invoice before change, supply after change

Invoice is issued on 28 September, supply occurs on 5 October and payment is received on 15 October. This is Section 14(b)(i). Time of supply is 15 October.

Example 5 — invoice and payment before, supply after

Invoice on 28 September, payment on 30 September and supply on 5 October. Section 14(b)(ii) applies. Time of supply is the earlier of 28 September and 30 September.

Example 6 — advance before change, invoice after

Payment on 28 September, supply on 5 October and invoice on 10 October. Section 14(b)(iii) applies. Time of supply is 10 October.

Example 7 — payment booked before, bank credit delayed

A supplier records payment in its books around the rate-change date, but bank credit occurs more than four working days after the change. The special proviso must be considered before deciding the payment date.

15. Construction, infrastructure and RA bills — Section 14 in practice

Construction businesses are particularly exposed to rate-change disputes because work may be executed before a rate change while measurement, certification, RA billing and payment occur later.

Project event	Section 14 question	Evidence
Work completed before rate change	Is supply before the change?	Measurement book, completion record, engineer certificate
RA bill issued after rate change	Was invoice issued before/after?	Tax invoice and RA bill dates
Client certification after rate change	Does certification determine the statutory supply/invoice event?	Contract, Section 31 analysis, certification correspondence
Advance received before change	Which Section 14 branch applies?	Bank statement and receipt ledger
Payment received after change	Does Section 14 make payment the relevant time?	Bank statement

Official GST adjudication material in a construction case demonstrates how Section 14 is used where a works-contract rate changed and invoices/payment straddled the effective date. citeturn1search23

Project-control recommendation: When a GST rate changes, prepare a project-level “cut-off register” for all open contracts and RA bills. List supply event, invoice date, payment date, rate-change date and the Section 14 clause selected.

16. What counts as the rate-change event?

Section 14 becomes relevant only when there is an actual change in the applicable rate. The effective date must therefore be established from the relevant rate notification or other legally operative instrument.

Check	Question
Old rate	What rate applied immediately before the effective date?
New rate	What rate applies from the effective date?
Effective date	From exactly what date/time does the new rate apply?
Classification	Did the HSN/SAC or exemption classification also change?
Notification	Which Central Tax (Rate), IGST rate, exemption or other notification implemented the change?
Contract	Does the contract contain a tax-change/revision clause?

The GST Council's 56th-meeting FAQ in September 2025 is a useful practical illustration: it explained how Section 14 applies to supplies made before the rate change when invoices and payments occur after the change. It also confirmed that rate changes are brought into force through the relevant rate notification. citeturn1search22

Do not confuse: A GST Council recommendation is not itself the operative rate change. Identify the notification that legally changes the rate and its effective date.

17. Legislative & GST Council development timeline

12th GST Council / draft GST law stage: The original legislative design already contained a dedicated Section 14 mechanism with the same basic before/after rate-change structure. citeturn0search1

1 July 2017: Section 14 came into force with the other Chapter IV provisions through Notification No. 09/2017-Central Tax dated 28 June 2017. citeturn1search7

2017 onward: Section 14 became the standard statutory framework for rate-change transition disputes. The operative rate itself is changed through separate rate notifications, while Section 14 determines the relevant time of supply.

2017–2026: The statutory Section 14 mechanism has remained focused on the six invoice/payment combinations. Practical disputes have generally arisen from identifying the correct supply date, invoice date, payment date and effective date of the rate notification.

22 September 2025: The GST Council's 56th-meeting rate changes provide a contemporary illustration of why Section 14 matters. The official FAQ specifically applies Section 14 to supplies straddling the new rate effective date. citeturn1search22

Current 2026 position: Section 14 remains the special time-of-supply mechanism for changes in GST rate. The current consolidated law continues to contain the six statutory scenarios and payment-date proviso. citeturn0search24turn1search1

18. Current-law position and an important research distinction

As of the current consolidated text available for 2026, Section 14 continues to contain the same core six-case framework. The India Code version records Section 14 as a provision in force and reproduces the complete before/after rate-change matrix. citeturn1search1

Important: Section 14 itself tells you which time of supply applies. It does not independently tell you the old and new GST rates. Those rates must be established from the relevant rate notification applicable to the goods/services and the effective date.

Therefore, a proper Section 14 file should have two separate conclusions:

Section 14 conclusion: which date is the time of supply?
Rate-notification conclusion: what GST rate was legally applicable on that time-of-supply date?

19. Professional Section 14 workflow

1. Identify the supply
Goods, service or both; determine actual supply event.

2. Identify the rate change
Find the operative notification and effective date.

3. Establish supply date
Before or after the rate-change date?

4. Establish invoice date
Before or after the change?

5. Establish payment date
Use books/bank evidence and the Section 14 proviso.

6. Select one of six clauses
14(a)(i)–(iii) or 14(b)(i)–(iii).

7. Determine time of supply
Record the exact statutory date.

8. Determine rate
Apply the rate notification effective on that date.

9. Reconcile
Invoice, books, payment, GSTR-1 and GSTR-3B.

10. Preserve evidence
Keep notification, contract and date evidence.

20. Common mistakes

Applying the new rate merely because payment was received after the rate change.
Applying the old rate merely because the work was physically performed before the rate change.
Failing to establish whether the supply itself occurred before or after the change.
Ignoring the distinction between invoice date and legally required invoice date under Sections 12/13/31.
Using the wrong Section 14 branch because invoice/payment dates were not separately documented.
Ignoring the special four-working-day bank-credit proviso.
Treating a GST Council recommendation as the operative rate notification.
Applying Section 14 without checking whether the HSN/SAC classification or exemption status also changed.
Using only the invoice date in construction RA-bill cases without analysing the underlying service event.
Failing to maintain a rate-change cut-off register for open contracts.

21. Audit documentation — what should be retained?

Evidence	Why it matters
Rate-change notification	Establishes the legally operative new rate and effective date.
Old rate notification	Establishes the rate immediately before the change.
Contract / PO	Supports supply event and contractual billing terms.
Delivery / completion evidence	Establishes whether supply occurred before or after the change.
Tax invoice	Establishes invoice date.
Bank statement	Establishes payment credit date.
General ledger	Establishes payment-entry date.
RA bill / certification	Important for construction and continuous services.
Section 14 working	Shows the six-case test and selected clause.
GST return reconciliation	Shows that the conclusion was implemented consistently.

Audit-ready principle: A reviewer should be able to identify the rate-change notification, the three relevant dates and the exact Section 14 clause without reconstructing the transaction from multiple disconnected files.

22. Related provisions

Provision	Why it matters
Section 9	Charging provision and applicable levy.
Section 12	Normal time of supply of goods; Section 14 overrides it in a rate-change situation.
Section 13	Normal time of supply of services; Section 14 overrides it in a rate-change situation.
Section 15	Determines value of taxable supply.
Section 31	Invoice timing can be critical to Sections 12/13 and therefore to Section 14 analysis.
Section 34	Credit/debit notes can arise when tax values are subsequently adjusted.
Section 142	Transitional provisions can become relevant to historical pre-GST transactions and should not be confused with Section 14.
Rate notifications	Determine the actual old/new rate and effective date to which Section 14 is applied.

Key distinction: Section 14 determines the time of supply in a rate-change situation. The relevant rate notification determines the rate itself. Both must be cited in a professional tax memo.

23. Key takeaways

Section 14 is a special rule for rate changes.
It overrides Sections 12 and 13 for the time-of-supply determination when its conditions apply.
There are six core statutory combinations based on whether supply, invoice and payment occur before or after the rate change.
Supply date is the first classification.
Invoice date and payment date then determine the applicable sub-clause.
The four-working-day bank-credit proviso is important for payment dates around the rate-change date.
Section 14 does not itself establish the GST rate. The applicable rate notification must be separately identified.
Construction and infrastructure businesses should maintain a rate-change cut-off register for open contracts and RA bills.
Historical rate-change transactions require the notification and law applicable to that period.

Disclaimer: This guide is for practical knowledge and working guidance. GST rates, notifications, circulars, rules, judicial decisions and portal processes can change. For historical or disputed transactions, verify the exact notification, effective date and statutory provisions applicable to the transaction.