You finish a logo project on 5 October, the client says "will pay this month", and you get busy. The invoice goes out three weeks later, or never. Many freelancers treat the invoice date as the moment GST starts. It often is, but only if no payment arrived earlier and you invoiced inside 30 days. The GST 30-day invoice rule decides when your tax liability is fixed, and it does not wait for you to open the invoicing screen.
Under Section 31 of the CGST Act, a service invoice is due within 30 days of the date of supply, and Section 13 then fixes the "time of supply" that decides which month's return carries the tax. This post walks through how the two work together, what a late invoice does, how part-payments and milestones behave, and a simple routine that keeps you inside the window.
GST is due on the earlier of the invoice date or the payment date, if you invoice within 30 days
When you issue the invoice inside the 30-day period, the time of supply of your service is whichever comes first: the date on the invoice or the date you received payment. That date decides the return period in which the tax is reported. So if a client pays on 20 October for work done on 5 October and you invoice on 25 October, the tax point is 20 October, the earlier date. If you had invoiced on 12 October, the tax point would be 12 October.
Section 13(2) of the CGST Act gives three rules. Rule (a) applies when you invoice on time. Rule (b) applies when you invoice late. Rule (c) is the fallback: if neither works, the date is the day your client records the service in its books. For a freelancer with ordinary invoicing, the first two rules are the ones that matter. The wording is in Section 13 of the CGST Act on the GST portal.
The 30-day clock runs from the service, not from payment
Section 31 and Rule 47 say a service invoice is due within 30 days of the date of supply of the service. The count starts when the service is provided, not when the client pays. An invoice may be issued before the service or after it, so long as it lands inside the window. Banks, insurers and NBFCs get 45 days, but that does not apply to a freelancer.
This matters because a slow-paying client does not stretch your deadline. If you deliver on 5 October, your invoice is due by 4 November whether the client pays on 10 October or on 10 December. Treat the delivery date as day zero. If you want the full list of what an invoice must carry, our guide to a GST invoice for freelancers covers it.
A late invoice moves the tax point back to the service date
If you issue the invoice after the 30 days are over, rule (b) applies. The time of supply becomes the date the service was provided or the date you received payment, whichever is earlier. In practice that is usually the service date. So a late invoice does not push the liability forward. It pulls it back to the month when you did the work.
Say you deliver on 5 October and raise the invoice on 12 November with no payment yet. Your window closed on 4 November, so the tax point is 5 October, not 12 November. That can mean the tax belongs to an earlier return period than the one you are filing now. Late invoicing can also bring interest and penalties, and the amounts depend on your case, so ask your CA before you file for the earlier month. The October tax then belongs in October's return, so the 12 November invoice reports October supply. The guide on GST return filing for freelancers explains the return side.
A part-payment is taxable only to the extent it covers
The Explanation to Section 13 says the supply is treated as made to the extent covered by the invoice or the payment. So a part-payment creates a tax point only for the part it covers. If a client pays 40 percent upfront, 40 percent of the supply has its time of supply on the payment date, and the rest follows the invoice or later payments.
"Date of receipt of payment" means the earlier of two dates: the day you enter the money in your books or the day it is credited to your bank account. So you cannot dodge an earlier tax point by delaying your bookkeeping. If the credit shows in the bank on the 20th, the 20th is the date, even if you record it on the 25th.
Milestone billing: invoice on or before the event, when the contract is a continuous supply
Section 31(5) gives special invoicing rules for a continuous supply of services. If the contract fixes a due date for payment, you invoice on or before that date. If it does not, you invoice before or when you receive payment. And if payment is tied to an event, such as a design approval, you invoice on or before the event is completed.
Do not assume your project qualifies. Section 2(33) defines a continuous supply of services as a recurring supply under a contract of more than 3 months with periodic payments. A six-week website build with three milestones may not meet that test. If it does not, the plain 30-day rule applies to each service you complete. When in doubt, invoice at each milestone and stay safely inside 30 days. The guide to a milestone payment schedule covers how to define the milestones themselves.
GST applies to an advance for services, because the 2017 goods relief did not cover them
Yes, an advance for a service can be taxable when you receive it. Notification 66/2017-CT removed the tax on advances only for goods supplied by registered suppliers who are not under composition. Services were left out. So a freelancer who takes an advance for a service should not assume it is outside GST until the invoice is issued. The payment date can become the tax point, as in the section above.
There is more on the receipt voucher and how the advance is adjusted against the final invoice in the post on GST on an advance payment. If you export services under an LUT, ask your CA how the advance is treated before you invoice.
A worked example with three dates
A ₹40,000 advance is taxed from 20 October and the ₹60,000 balance from 30 October, as long as you invoice by 27 November. The numbers are made up. You agree a ₹1,00,000 branding fee, the client pays ₹40,000 on 20 October, you finish on 28 October and invoice the full fee on 30 October.
The ₹40,000 has its time of supply on 20 October, the earlier of payment and invoice. The remaining ₹60,000 has its time of supply on 30 October, the invoice date, assuming the balance is paid after that. Both fall inside the window, which closes on 27 November. Now change one fact: you forget to invoice until 5 December, past the window. The service date of 28 October becomes the tax point for the unpaid ₹60,000, so the tax lands in October's return period even though you invoiced in December. On an on-time invoice the tax point would have been 30 October, also in October, so the real cost of the delay is a December invoice that reports October tax, which may sit in a return you have already filed.
A simple invoicing routine that keeps you inside the window
Invoice on the day you deliver, or the day you hit a milestone, and never let more than a few days pass. That keeps you far from the 30-day edge and keeps your invoice date close to your tax point. Record every payment in your books the day it lands, since that date can matter. And give each invoice a clean number, which the guide on invoice numbering rules explains.
Rinto creates GST-ready invoices with automatic IGST/CGST/SGST calculation, so an invoice dated on delivery day takes a minute, and you can mark invoices paid to see who owes you what. It does not file returns or process payments. This post is general information, so confirm how these rules apply to you with a CA.
Frequently Asked Questions
Within how many days must a freelancer issue a GST invoice for services?
Section 31 of the CGST Act and Rule 47 require a service invoice within 30 days of the date the service is supplied. The invoice can be issued before the service or after it, as long as it falls inside that window. Banks, insurers and NBFCs get 45 days, but a freelancer does not. The count starts from the service, not from the day the client pays. If you deliver on 5 October, your invoice is due by 4 November.
Is GST payable on advance received for services?
Do not assume it is not. Notification 66/2017-CT removed the tax on advances only for supplies of goods, by registered suppliers who are not under composition. It did not extend to services, so an advance for a service can become the time of supply on the date you receive it, to the extent of the amount received. The balance follows the invoice date or later payments. Receipt vouchers are still part of the picture for services. Exporters under an LUT should confirm their case with a CA.
Does the 30-day invoice rule start from payment or from the service?
It starts from the date of supply of the service, not from payment. A slow-paying client does not extend your deadline. If you finish work on 5 October and the client pays on 10 December, the invoice was still due by 4 November. Payment matters in a different way: if money arrives earlier than the invoice, the payment date can become the time of supply for the amount received. So the invoice deadline is counted from the service, and the tax point is the earlier of invoice or payment when you invoice on time.
What happens if I issue the GST invoice late?
If you invoice after the 30 days, the time of supply becomes the date the service was provided or the date of payment, whichever is earlier. In most cases that is the service date. So the tax belongs to the month of the work, not the month you finally sent the invoice, and it may sit in a return period you have already filed. Late invoicing can also bring interest and penalties, and the amounts depend on your case, so ask your CA before you file for the earlier month. Raising invoices on delivery avoids the problem completely.
When do I raise the GST invoice for milestone payments?
If your contract is a continuous supply of services, Section 31(5) says to invoice on or before the due date in the contract. Where payment is tied to an event, invoice on or before the event is completed. A continuous supply means a recurring supply under a contract of more than 3 months with periodic payments, so many short milestone projects do not qualify. If yours does not, the ordinary 30-day rule applies to each service you complete. The simplest approach is to invoice at each milestone, well inside 30 days, and confirm the classification with your CA.