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Is GST applicable on Advance for Goods???

Mitesh (Professional) (68 Points)

10 July 2018

one of the Debtor has given Advance for the goods in the month of May and June 2017 against which invoice has been issued in the month of July and August with GST.

So whether GST is applicable on such Advance??

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13 Replies

RAJA P M ("Do the Right Thing...!!!") (128091 Points)
Replied 10 July 2018

Originally posted by : Mitesh
	one of the Debtor has given Advance for the goods in the month of May and June 2017 against which invoice has been issued in the month of July and August with GST.So whether GST is applicable on such Advance??

No... GST is not applicable.

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Deepak Gupta (CA Student) (15922 Points)
Replied 10 July 2018

The GST law provides for payment of GST at the time of receipt of advance towards supply of goods or services.

Initially, Notification No. 40/2017-Central Tax, dated 13 October, 2017 was issued to remove the requirement of payment of GST on advance receipts towards supply of goods, for persons having turnover of less than Rs 1.5 crores in a year.

Vide Notification No. 66/2017-Central Tax, dated 15 November, 2017, this relaxation has been extended to all persons, except persons opting to pay GST under composition scheme.

It should be noted that this relaxation is applicable only on the advances received post 15 November, 2017 for supply of goods.

Post this notification, the time of supply for goods would be the date of issue of invoice by the supplier (or the due date, by when the invoice needs to be issued).

So, in your case, whether the turnover is below or above Rs. 1.5 crore, GST will be applicable on consideration received in advance, during the period 01.07.2017 to 12.10.2017.

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Mitesh (Professional) (68 Points)
Replied 10 July 2018

turnover for the 1st quarter is approx 1 cr. and total turnover for the year is 4.65 cr

I think GST will be levied on such advance..

RAJA P M ("Do the Right Thing...!!!") (128091 Points)
Replied 10 July 2018

Yes... GST applicable as per the Periods if it's 2017...

Mitesh (Professional) (68 Points)
Replied 10 July 2018

thank you for giving me the suggestion

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Shivam RC (Student) (23683 Points)
Replied 10 July 2018

Yes Sir...
GST will be applicable on ADVANCE Received from Customer.

It is within the purview of Section 7 i.e. SUPPLY :

Supply includes : all forms of supply of goods or services or both such as Sale, Transfer, Barter, Exchange, License, Rental, Lease or Disposal made or AGREED TO BE MADE for a Consideration by a person in the course or furtherance of business.

Therefore, the phrase "AGREED TO BE MADE", in the definition of Supply makes it very clear that Advance Received are also subjected to GST...

Mitesh (Professional) (68 Points)
Replied 10 July 2018

Yes sir

but my doubt was that advance received prior to GST period and invoice issued after GST

so whether such advance is to be considered for GST liability

as invoice clearly mentioned GST but slightly confuse about levy of GST

Pankaj Rawat (GST Practitioner) (55052 Points)
Replied 10 July 2018

Dear Nitesh

CGST Notification no. 66/2017, St 15/11/2017 exempts all taxpayers from payment of tax on advances received in case of supply of goods

But the said notification is effective from 15/11/17 & the advance reced.by U in May & June (Pre GST) ,
So no need to deposit GST on advances reced in Vat regime

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RAJA P M ("Do the Right Thing...!!!") (128091 Points)
Replied 10 July 2018

Yes... I agreed to Mr Pankaj Rawat Reply and View...

Also GST not applicable before GST transaction if advance receipt...

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Mitesh (Professional) (68 Points)
Replied 10 July 2018

ok sir

but GST has been charged on such invoice than Advance criteria we don't need to check??

am I correct!??

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RAJA P M ("Do the Right Thing...!!!") (128091 Points)
Replied 10 July 2018

Yes... You are exactly correct.

Mitesh (Professional) (68 Points)
Replied 10 July 2018

ok sir

but GST has been charged on such invoice than Advance criteria we don't need to check??

am I correct!??

venkat (Tax Consultant) (53 Points)
Replied 26 December 2018

PRE GST REGIME IF ADVANCE RECEIVED ALSO NOT TAXABLE. BECAUSE OF IT IS NOT GST TIME PERIOD. WHILE YOU ARE INVOICING YOU SHOULD BE CHARGE GST ON SALE VALUE.

SIMPLE BEFORE GST STARTS WHO CAN ASSUME GST ON ADVANCES. HENCE YOU NEED NOT THINK ABOUT GST ON ADVANCES BEFORE GST