Adjustment of Liability against GST paid on advance

[Ashiesh Prremji]

Dear Sir,

If GST on advance has been paid & later such advance refunded (a Refund Voucher also issued) as deal not finalized due to some reason. My issue is if we issue an Invoice to such Party for another deal, whether we can use that GST which had been paid previously on advance 'or' we have only option to go for Refund ??

Thanks,

AI Summary

Debate on Adjusting GST on Refunded Advances: Refund vs. Invoice Adjustment; Consensus Favors Official Circular Guidance A discussion on a forum addresses the issue of adjusting GST paid on advances when a deal is not finalized, and the advance is refunded. Participants debate whether the GST paid can be adjusted against a new invoice for another deal or if a refund is the only option. Opinions vary, with some citing GST provisions and circulars that suggest a refund is necessary, while others argue for adjustment due to no revenue loss to the government. Clarifications are provided on unjust enrichment and the use of the Electronic Credit Ledger. The consensus leans towards following the official circular and opting for a refund.