Gst on advance paid on services

[Richa Goyal]

My newly formed firm who has not applied for GST is paying advance to a company for services. That company will pay GST on advance. I will get GST number in 20 days as I have still just applied for PAN. that company will issue me a Bill in January. Now will I get GST credit in January or just because when that Company has paid GST when I was not having GST number, I will not be able to claim credit ?

[ANITA BHADRA]

Dear Madam

Section 18 of CGST Act 2017 states - If a person applied for registration within 30 days from the date on which he becomes liable - shall be entitled to get ITC from the day immediately preceding the day he become liable .

In your case , suppose you formed firm and became liable for GST on 01st Nov 2017 and you applied for GST registration within 30 November , You will get credit of tax on advance dt 01st Nov 2017 .

I hope , your query get resolved

Regards

[Richa Goyal]

thank you for your reply... in case, I get registration late due to certain reason, how shall i take the credit and how shall it reflect in my returns.. since the seller must have already shown my sales n their B2C sales.

Thanks

[Vamsi Krishna]

As of now GSTR-2 has been deferred and hence no need to bother about matching concept from GSTR-1 of the seller.

You can claim credit subject to the timelines mentioned in the above reply.

I think you shall first get PAN and then GST Reg since GST Reg is based on PAN.

So try to get both of them quickly to avail timely credits.

AI Summary

Input tax credit on advances may be claimed if registration is obtained timely, subject to statutory timelines and return rules.
A person who becomes liable to register and applies within the prescribed short period is entitled to input tax credit from the day immediately preceding liability, including tax on advances paid to a supplier; delayed registration subjects credit to statutory timelines and return procedures, and the deferment of purchase-side matching reduces immediate reliance on supplier returns. Obtaining PAN before GST registration is a recommended sequencing step.