Advance received

[RENGARAJ R.K]

When a person receives advance amount, he has to pay GST if the supply is not made in the same month of receipt. Now the question is: I receive cash ₹ 50,000.00 advance for a product with a GST of 18%. Whether I should pay GST for ₹ 50,000.00 or should i split the turnover by reverse working and tax to be paid for ₹ 42,373.00. What the relevant CGST/SGST provision says? Earlier in Service Tax regime, when advance amount is received we used to pay for full value of ₹ 50K.

Thanks

[Guest]

when we have received advance, we have done reverse calculation of advance recd for GST liability, submitted advance receipt voucher to client indicating GST details.

[Ganeshan Kalyani]

I have read in twitter question and answer. It was mentioned that GST on advance to be worked out by inclusive method. That is you will have to pay GST within the advance amount received. Thanks.

[Himansu Sekhar]

It is the cum tax value.

AI Summary

GST on advances must be remitted from the advance using inclusive valuation, with voucher details shown. GST is payable on advances received when supply does not occur in the same month; the advance is treated as cum-tax and the taxable value is derived by reverse calculation so that GST is discharged from the amount received. Suppliers should issue an advance receipt voucher showing GST details and account for the tax accordingly.