TaxTMI 
TaxTMI 
2025 (11) TMI 1629
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.... 4.1 The applicant is engaged in the business of manufacturing, supply, and servicing of solar and electric boats. The applicant undertakes the design and construction of boats based on customer-specific requirements. 4.2 Payments from customers are received in multiple stages, which include: • An initial advance at the time of order confirmation, • Part payments during different phases of the manufacturing process, and • Final payment upon delivery of the boat. 4.3 The activity involved is the supply of goods and not of services. Additionally, the manufacturing process for each boat may take several months and, in some cases, extend beyond a financial year and the recognition of revenue may take considerable time. Consequently, they are not issuing tax invoices upon receipt of advances or part payments from the customers, and are presently not paying GST on advance received for supply of goods. In such instances, the applicant is recordings the advance received from the customers as receipts and tax invoice is issued upon supply of the boat. Furthermore, they recognize the advances received as "Unbilled Revenue" in their books of accou....
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....contends that this exemption is discretionary in nature and not mandatory. It provides a beneficial option to the registered person, but does not prohibit them from choosing to pay GST on advances received and issue tax invoices accordingly. Therefore, the applicant is of the view that they may, at their discretion, opt not to avail the exemption and instead pay GST on receipt of advance if tax invoices are issued at that stage. 5.2 In support of this position, the applicant refers to Section 31(1) of the CGST Act, 2017, which provides that a registered person supplying taxable goods shall issue a tax invoice before or at the time of (a) removal of goods for supply involving movement, or (b) delivery of goods or making them available to the recipient in any other case. Based on this provision, the applicant submits that there is no restriction on issuing a tax invoice prior to the actual removal or delivery of goods. Consequently, a tax invoice can be issued at the time of receiving an advance payment, provided it is issued before the removal of goods, which satisfies the requirements of Section 31. 5.3 Furthermore, the applicant notes that the liability to pay GST on supply ....
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....T Act, relating to notification applicability and tax liability determination. The application is therefore admitted for consideration on merits. 8.2 The applicant manufactures and supplies custom-built solar and electric boats and in this regard, receives part payments in different stages before' delivery of the goods. Currently, the applicant only issues a receipt and is not paying GST on advances, and tax invoices are issued only upon final delivery. However, they want to know whether there is any bar on issuing invoice and paying tax as and when advances are received. In the event of switching to this procedure, there would be a difference between the value in e-way bill and final invoice value since e-way bill would cover the value of supply in full whereas the final invoice would cover only the outstanding amount after discounting the advances received. The likelihood of this difference, has also been raised as a concern by the applicant. They also want to know whether they can raise a tax invoice for the total value of supply at the time of delivery of goods and offset the advances received against issuance of credit notes to the customer. 8.3 The applicant submits....
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.... optional in nature and that the applicant may, at its discretion, choose not to avail such benefit and instead pay GST on advances received for supply of goods. This contention, however, cannot be accepted. Notification No. 66/2017 is not an exemption issued under Section 11 of the CGST Act, which enables the Government to exempt certain supplies from tax conditionally or unconditionally. Rather, it has been issued under Section 148, which empowers the Government to specify special procedures to be followed by certain classes of registered persons with respect to registration, furnishing of returns, payment of tax, and allied matters. The notification thereby lays down a mandatory procedural rule for suppliers of goods namely, that they shall pay tax at the time of supply as determined by Section 12(2)(a) of the Act. The use of the word "shall" in the operative portion of the notification denotes an imperative command and not a permissive option. It alters the timing of tax liability for the entire class of persons supplying goods by disabling the operation of Section 12(2)(b) (relating to the date of payment) and confining the time of supply solely to the invoice date as per Sect....
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.... is not an invoice, but a "receipt voucher or any other document, containing such particulars as may be prescribed". The document in this regard is prescribed under Rule 50 of the CGST Rules, 2017. On verification of this Rule, we find that the prescribed document is not the same as a Tax Invoice prescribed under Rule 46 of the CGST Rules, 2017. Hence, the particular situation as expressed in the application is not to be circumvented by issuance of multiple invoices, but by issuance of document under Rule 50 (receipt voucher) with regard to advances and by issuance of document under Rule 46 (Invoice) at the time of supply. GST law does not permit issuance of multiple tax invoices for a single supply in case of supply of goods. 8.3.7 It is pertinent to note that while Notification No. 66/2017-Central Tax alters the determination of "time of supply" under Section 12(2) by confining it to clause (a), the issuance of tax invoice is governed independently by Section 31 of the CGST Act. In terms of Section 31(1), a registered person supplying taxable goods shall issue a tax invoice before or at the time of removal or delivery of goods. The provision does not envisage the issuance of a....