TaxTMI 
TaxTMI 
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?
Advances as on July 1 2017
05 Mar 2021 
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Advance payments and deposits: GST liability on opening balances depends on whether receipts are treated as consideration or refundable deposit.
Characterisation of pre-GST receipts as advance or deposit determines GST liability on opening balances: advances constitute potential consideration and attract GST on supply/invoice issuance, whereas deposits are not consideration unless applied as such. Transitional provisions preserving earlier levy may preclude fresh GST where sums were leviable under the prior regime, but refundable collections retaining deposit character do not qualify as supply and draw GST only when utilised for a supply. (AI Summary)
Characterisation of pre-GST receipts as advance or deposit determines GST liability on opening balances: advances constitute potential consideration and attract GST on supply/invoice issuance, whereas deposits are not consideration unless applied as such. Transitional provisions preserving earlier levy may preclude fresh GST where sums were leviable under the prior regime, but refundable collections retaining deposit character do not qualify as supply and draw GST only when utilised for a supply. (AI Summary)