Section 2(33) of the CGST Act—
“(33) ―continuous supply of services‖ means a supply of services which is provided, or agreed to be provided, continuously or on a recurrent basis, under a contract, for a period exceeding three months with periodic payment obligations and includes the supply of such services as the Government may, subject to such conditions, as it may, by notification, specify.”
Section 31/5 of the CGST Act—
(A) where the due date of payment is ascertainable from the contract, the invoice shall be issued on or before the due date of payment;
(B) where the due date of payment is not ascertainable from the contract, the invoice shall be issued before or at the time when the supplier of service receives the payment;
(C) where the payment is linked to the completion of an event, the invoice shall be issued on or before the date of completion of that event.
Interpretation / Explanation—
A “continuous supply of services” refers to services provided continuously or recurrently under a contract for a period exceeding three months, with obligations for periodic payments. The key elements are the duration exceeding three months, the presence of a formal contract, regular payment intervals, and potential government-specified inclusions.
Hence, A “continuous supply of services” involves services provided under a contract exceeding period over three months with regular payments, including any additional services specified by the Government.
Important Points—
- The services, which are not continuous in nature and less than 3 months duration, the invoicing are governed by Rule No. 46 and Rule No. 47, and
- When the services are continuous in nature as applied under Section 2(33) of the CGST Act: Rule no. 46 is still applicable but time of supply is evaluated by Section 31—5A or 5B or 5C of the CGST Act not by Rule No. 47.