GST LIABILITY AGAINST ADVANCE RECEIVED FROM CUSTOMERS

[SURYAKANT MITHBAVKAR]

Can we adjust GST Liability on advance received from customers against ITC available during the month or we have to make cash payment only like RCM.

[Rajagopalan Ranganathan]

Sir,

You can adjust GST Liability on advance received from customers against ITC available during the month. There is no prohibition against such adjustment in CGST Act, 2017.

[KASTURI SETHI]

Yes. Undoubtedly you can.

[DR.MARIAPPAN GOVINDARAJAN]

You have to issue a bill incorporating the value of transaction with GST and then you adjust the advance payment made and GST in the invoice.

AI Summary

GST liability on advances can be discharged using input tax credit where available, subject to invoicing and adjustment. GST liability on advances received may be discharged by utilising available input tax credit; there is no prohibition against such adjustment. The supplier must issue a tax invoice incorporating the transaction value and applicable GST, and adjust the advance payment and the GST liability in that invoice.