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

GST on advance: refund voucher and refund filing required; adjustment against other supplies remains disputed.
Whether GST paid on an advance may be adjusted against tax on a later invoice is disputed: administrative guidance requires issuance of a refund voucher and filing the prescribed refund form to recover tax paid where no invoice issued; some practitioners nonetheless argue adjustment against subsequent liability is permissible where there is no revenue loss. Use of input tax credit or electronic credit ledger to pay advance tax does not change refund eligibility, and returning the tax component to the recipient avoids unjust enrichment concerns.