Fate of services tax paid on advance received from customer under GST

[Prakash Gupta]

Dear Expert,

Need your help on below mentioned issued under GST. Brief facts and query is as under:

The company is in business of project construction since year 2015. It has received mobilization advance of Rs. say 10 Crore in January 2017 ( before GST regime) and on which it paid service tax as per the applicable rate.

Now under GST regime the company will raise invoice and willing to set off its GST liability with earlier service tax, which has been paid advance received.

With the above mentioned background, my query is as under:

“whether service tax paid on advance received from clients can be set off with GST liability ? if yes, then how and where this advance amount need to show in Trans-01 ?

AI Summary

Company Seeks GST Set Off for Pre-GST Mobilization Advance; Experts Debate Section 142(11)(b) and 142(11)(c) Applicability A company in the project construction business received a mobilization advance of Rs. 10 Crore before the GST regime and paid service tax on it. The company seeks to set off this service tax against its GST liability. Experts in the forum discuss the applicability of TRANS-1, with one expert clarifying that TRANS-1 is for forwarding credit and not applicable here. Another expert suggests that the contractor should file TRAN-1 under section 142(11)(c) to claim the service tax paid and refund it to the company. The discussion also covers the treatment of mobilization advances under sections 142(11)(b) and 142(11)(c) of the CGST Act.