Advances as on July 1 2017

[Ashish Diwedi]

We are doing job work for textile industry. As on July 1st 2017 we had opening balance in advances received from principal of ₹ 50 lakhs. The advances were received by us in the service tax regime. We did not pay service tax on the same as our services were exempt vide Mega Notifi No. 25/2012 - ST. Are we liable to pay GST on the opening advances on July 2017?

AI Summary

GST on Pre-GST Advances in Textile Job Work: Section 142(11)(b) Clarifies No GST if Previously Taxed A query was raised regarding the applicability of GST on advances received before the GST regime began on July 1, 2017, specifically for job work in the textile industry. The advances were initially exempt under the service tax regime. One contributor explained that advances are adjusted at the time of service completion, and GST liability arises only upon supply of service or issuance of an invoice. Another mentioned that under Section 142(11)(b), no GST is due if tax was applicable under the service tax regime, even if exempt. Further discussion touched on the distinction between deposits and advances and their impact on GST.