Advance receipt-Tax period & time of supply

[Narendra Soni]

Dear Experts,

Suppose advance against supply has been received to us on 05.07.2017, actual supply is made on 17.08.2017.

Kindly confirm whether tax liability has to pay on the basis of advance received in return dtd 20th of August or on the basis of invoice in return dtd.20th of Sept.

AI Summary

Time of supply on receipt of advance: tax liability arises on receipt and a receipt voucher must be issued immediately.
Tax liability arises on receipt of an advance payment; the registered person must issue a receipt voucher evidencing the advance and showing rate and amount of tax, such that tax is payable at the time of receipt. Advances without an invoice must be reported in the advance section of the periodic return, and separate compliance procedures apply for zero rated supplies made under bond or letter of undertaking.