Go Ad-Free on CAclubindia with Daily Mobile Updates. Subscribe Now!

Advance received from customer

20 June 2017

e. g. If advance received from customer towards future supply, whether GST is payable? Answer is yes than my 2nd question, how to reversed GST if order is cancelled by the customer.

Reply
Follow
Share

14 Replies

Vinay Garg (Student cum businessman cum professional) (859 Points)
Replied 20 June 2017

Yes, GST is payable if you receive the payment in advance.

Upgrade to CAclubindia Pro. Subscribe Now!

Lalit Nagpal (Assistant Manager) (541 Points)
Replied 20 June 2017

credit note will be issued in the month of cancellation and will be shown in return.

Vinay Garg (Student cum businessman cum professional) (859 Points)
Replied 20 June 2017

Dear Mr. Lalit Nagpal,

Credit Note can not be issued if there is no Invoice. As in this case gst becomes payable on receipt of advance, no Invoice has been issued.

Lalit Nagpal (Assistant Manager) (541 Points)
Replied 20 June 2017

I think no other option in this case

Vinay Garg (Student cum businessman cum professional) (859 Points)
Replied 20 June 2017

Well. The case is still not clear yet. Waiting for a reply from govt in this regard

Upgrade to CAclubindia Pro. Subscribe Now!

Raghavan RVS (2 Points)
Replied 21 June 2017

there is another problem..on advance you charge gst @ say 12% and in final invoice you charge @ 5% only....then how do you adjust the excess charged gst on advance which is already paid to govt???

RAJA P M ("Do the Right Thing...!!!") (128091 Points)
Replied 21 June 2017

Mr. Ankush Dhuri,
If your advance ll be refundable you can create PAYMENT voucher and ll be shown in return. SI simple

RAJA P M ("Do the Right Thing...!!!") (128091 Points)
Replied 21 June 2017

Mr. Raghavan RVS,
You received advance as above and u can supply particular rate of tax invoice. If not high/less taxable value. You can fall RCM...

1 Like

Ram Maddineni (Head of Finance Accounts and HR) (22 Points)
Replied 21 June 2017

Hi ,

Please help me understand on invoiceing and taxation procedures incase of supply to indian Govt Factory having EPCG and this EPCG they have taken now after 60%supply of matreial completed .

We are manufature of Machines , till date we are supplied to same PSU costmer with ED 12.5 % and CST 2% , now customer taken EPG asking me not to chatge any taxes .

How will i do this, what is the practice as per legal position.

thanks in advance.

Ram

Anurag Agarwal (CA Final, Advocate) (292 Points)
Replied 21 June 2017

Receipt voucher shall be issued at the time of receipt of advance payment and subsequently if supply is not made then REFUND VOUCHER will be issued to the person whi had made the advance payment

Upgrade to CAclubindia Pro. Subscribe Now!

Dev Kumar (Accounts Manager) (107 Points)
Replied 21 June 2017

A hotelier recd an advance before July 1, 2017 for a marriage function to be held in Nov 2017. Now will he have to declare the advance amount on July 1, if yes in which form or return? Will he have to pay gst on advance taken before July 1?

RAJA P M ("Do the Right Thing...!!!") (128091 Points)
Replied 21 June 2017

Mr. Dev.,

1. GST levied after July 1st. If you received before july its not liable under GST. The function is after 1st July u ll be give GST Tax invoice and you ll b pay GST Tax when return.

2. The advance is taxable. It's shown in GSTR1. GSTR 1 contain Sales, Sales Credit/Debit Note and Advance Receipts. You can shown your advances on above "Advance Receipts" section...

3. It's same as 1....

RAJA P M ("Do the Right Thing...!!!") (128091 Points)
Replied 21 June 2017

Originally posted by : Ram Maddineni
	Hi , Please help me understand on invoiceing and taxation procedures incase of supply to indian Govt Factory having EPCG and this EPCG they have taken now after 60%supply of matreial completed . We are manufature of Machines , till date we are supplied to same PSU costmer with ED 12.5 % and CST 2% , now customer taken EPG asking me not to chatge any taxes . How will i do this, what is the practice as per legal position. thanks in advance. Ram

No more changes for GST billing. You can raise GST Invoice to your customer befor understanding your purchase order by you and your customer.

Then.,

In my view no more effects affected your sales. Just 0.5% difference made GST vs ED&CST rates for the Machinery...

Ajay Darak (Controller) (27 Points)
Replied 23 June 2017

Need to pay GST on advance received either you Gross-up the amount received from customer or ask cusotmer to pay advance with GST. Further, Advance received voucher to be sent gcustomer classifying between advance against supplies and GST