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

[MUKUND THAKKAR]

GST is applicable in case you have received advance in connection of supply of goods or services,

In your case you had paid advance for procurement of import goods so GST is not applicable to you under RCM.

if you paid RCM and material arrived in India in BCD and IGST will be charged by custom. if you paid under RCM than your import duty will be double. first you paid under RCM and time of clearance of goods.

RCM is not applicable to you against advance for procuring Import Material.

[SNEHAL SHAH]

Thanks a lot sir for valuable reply .

AI Summary

Reverse charge on advance payments for imports not applicable; pre-import RCM may cause duplicate tax liability at customs. Advance payments for procuring imported goods do not attract GST under the reverse charge mechanism; RCM is not applicable to such advances. Paying tax under RCM before import clearance may result in duplication because customs will levy basic customs duty and IGST at the time of clearance.