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advance tax on services and goods

mohammad tarique sohail (accountant) (195 Points)

24 September 2018

I have received advance in Dec 17 .if works contract done labour with material . Will it consider goods or services. will have to pay tax on advance or not. because in November notification advance tax on services not on goods. pls clarify.

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praveen (Expert) (350 Points)
Replied 24 September 2018

Works Contact- Supply of Service or Supply of Goods?

A simpler treatment has been introduced for Works Contract under GST. Schedule II clearly states that Works Contract amounts to supply of services, hence the confusion whether it will be categorised as supply of service or goods has been done away with. A single rate has been fixed for services provided under Works contract and the entire amount shall be taxed at this rate without any bifurcation between goods and services.

As per the CGST Notification Advance Received for goods is Exempt from GST

But in your Scenario, It comes under Services So you need to pay GST on Advance Received in Dec'17 by 20th Jan'18...