Goods and service tax on Advance payment to Overseas Supplier

[SNEHAL SHAH]

Dear sir ,

As per GST Law Tax liability on Advance also .

If we give order for procure goods/materials to overseas vendor ( As a Import ) and some amount will pay as a advance , than GST applicable on advances and who will pay GST ( as per me GST will pay as per reverse charge mechanisam ).

Please provide your valuable input sir .

Regards,

SNEHAL

AI Summary

GST Not Applicable on Advance Payments for Imports; Customs Charges BCD and IGST on Arrival to Avoid Double Taxation. A query was raised about the applicability of Goods and Services Tax (GST) on advance payments made to overseas suppliers for importing goods. The inquirer suggested that GST might be applicable under the reverse charge mechanism (RCM). A response clarified that GST is not applicable on advances paid for importing goods under RCM. Instead, Basic Customs Duty (BCD) and Integrated GST (IGST) are charged by customs upon the goods' arrival in India. Paying GST under RCM would result in double taxation, as it would also be paid at the time of goods clearance.