Advance on Contracts upto 30th June 2017

[Sandeep deshpande]

What happens to open advances which are collected issuing proforma Invoices upto 30th June 2017 ? How do we invoice for same in current regime if goods and services against the same were not supplied upto 30th June 2017.

[Rajagopalan Ranganathan]

Sir,

Had you paid service tax on the advance amount received prior to the appointed date, that is, 1.7.2017. If the answer is yes then you need not pay GST on the said advance amount. you have to pay GST on the amount arrived at after deducting the advance amount from the total amount charged for providing the service.

[THYAGARAJAN KALYANASUNDARAM]

Dear sir,

As per my understanding, the payment of service tax made against the advance received prior to 30.06.2017 whereas the supplies made after the appointed day and such credit shall be calculated and take credit in the form TRAN-1 only. Please refer sec 142(11)(c) of the cgst act.

[KASTURI SETHI]

Yes. Sir I agree with you . I have read the same.

AI Summary

Treatment of advances for GST: pre-GST taxed advances offset GST liability; transitional credit migrated via TRAN-1.
Where service tax was paid on an advance received before the appointed day, that advance is not subject to GST and the taxable value for the service supplied later is computed after deducting the advance; any credit relating to tax paid on such advances is to be calculated and migrated under the prescribed transitional procedure using TRAN-1.