Tax Invoice in case of continuous supply of services :
“Continuous supply of services” means a supply of services which is provided, or agreed to be provided, continuously or on recurrent basis, under a contract, for a period exceeding three months with periodic payment obligations and includes supply of such services as the Government may, subject to such conditions, as it may, by notification, specify – section 2(33) of CGST Act.
In case of continuous supply of services, provisions for issue of tax invoice are as below. These provisions are subject to section 31(3)(d) of CGST Act, which provide for issue of receipt voucher when advance is received – section 31(5) of CGST Act.
Before due date of payment – Where the due date of payment is ascertainable from the contract, the invoice shall be issued on or before due date of payment. [However, if advance is received, receipt voucher is required to be issued and not tax invoice]
When due date of payment is not ascertainable, date on which payment received – Where the due date of payment is not ascertainable from the contract, the invoice shall be issued before or at the time when supplier receives payment [However, if advance is received, receipt voucher is required to be issued and not tax invoice]
When payment linked with completion of event i.e. milestones – Where the payment is linked to the completion of an event (i.e. milestones as specified in contract), the invoice shall be issued on or before date of completion of that event.
For example, in construction contracts, various milestones (like plinth, first floor, slab etc.) may be prescribed for payments. In that case, tax invoice is required to be issued when each such milestone is reached.