Kunal Vanjare (27 Points)
12 July 2021Hello, If payment for a certain sales invoice is not received in the same month (credit - 30 days terms for example), should I consider that invoice for GSTR-1 in that month? Or when the client transfer the payment?
Also, if payment terms for an order are 50% advance & balance before dispatch, do I have to consider the 50% advance payment in GSTR-1? Considering dispatch happens the next month & balance payment is also received the next month.
Thank you.
CMA Poornima Madhava
(CMA)
(13112 Points)
Replied 12 July 2021
Data in GSTR1 to be uploaded as and when the invoice is raised (receipt of payment is immaterial).
No GST is levied on advance receipts against sale of goods. So, for the purpose of GST returns, you may consider such transactions at the time of invoice.
Kunal Vanjare
(27 Points)
Replied 12 July 2021
| Originally posted by : CMA Poornima Madhava | ||
 |
Data in GSTR1 to be uploaded as and when the invoice is raised (receipt of payment is immaterial). No GST is levied on advance receipts against sale of goods. So, for the purpose of GST returns, you may consider such transactions at the time of invoice. |
 |
Yes but not all clients agree to an upfront payment. So there are transactions where I supply the material with the relevant Tax Invoice, but the payment for said invoice is received after 30 days. So in this case, if invoice date is 12th July, but payment will only be received after 12th August, you're saying I still need to add this invoice in the GSTR-1 for month of July. Correct?
What if the order(received in July) comes with a 50% advance payment, and the balance payment will happen the next month? A CA friend of mine has advised me that Invoice date or advance whichever is earlier is to be considered in gstr1. Can you clarify this please?
Kunal Vanjare
(27 Points)
Replied 12 July 2021
In this case, I guess payment terms of either 100% before dispatch, or 100% after dispatch (immediately or on credit) would make things easier right? Instead of going for a partial payment terms.
CMA Poornima Madhava
(CMA)
(13112 Points)
Replied 12 July 2021
I completely agree with you that not all clients would be willing to pay in advance or against delivery. This is the risk that a business is exposed to. Unlike service tax, there is no concept of payment of tax on receipt basis in GST regime. Hence tax in respect of an invoice raised in July needs to be paid in August itself.
As far as advance receipts are concerned, as I have already let you know that there is no need to pay GST on advance receipts in case of supply of GOODS. If such advance is towards supply of SERVICES, then you are required to pay GST on advance receipts too. I don't know why your CA friend has suggested in a different way.
If you are in a position to demand payment either in advance or against dispatch/delivery, you can easily get rid of this situation of blockage of funds.But not everyone would have this privilege in business!
Kunal Vanjare
(27 Points)
Replied 12 July 2021
| Originally posted by : CMA Poornima Madhava | ||
|
I completely agree with you that not all clients would be willing to pay in advance or against delivery. This is the risk that a business is exposed to. Unlike service tax, there is no concept of payment of tax on receipt basis in GST regime. Hence tax in respect of an invoice raised in July needs to be paid in August itself. As far as advance receipts are concerned, as I have already let you know that there is no need to pay GST on advance receipts in case of supply of GOODS. If such advance is towards supply of SERVICES, then you are required to pay GST on advance receipts too. I don't know why your CA friend has suggested in a different way. If you are in a position to demand payment either in advance or against dispatch/delivery, you can easily get rid of this situation of blockage of funds.But not everyone would have this privilege in business! |
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So to sum up, what is the recourse if you HAVE to supply the goods without or with partial payment (with invoice)? That invoice will have to be accounted for in that month's GSTR-1 correct? Or is there another provision?
Balamurali Unnithan MS
(STUDENT)
(1631 Points)
Replied 14 July 2021
CAclubindia
