TAX LIABILITY ON ADVANCES RECEIVED

HI..

ABC LTD IS A CONSTRUCTION COMPANY AND PROVIDING CONSTRUCTION SERVICES TO XYZ COMPANY,

AS PER AGREEMENT BETWEEN ABC LTD & XYZ CO. THERE IS SOME MILESTONE OF WORK FOR PAYMENT BY XYZ TO ABC LTD,

MEANWHILE XYZ COMPANY GIVING REGULARLY ADVANCES TO ABC LTD, MY QUERY IS ABC LTD WILL RAISE INVOICE TO XYZ ONLY AFTER COMPLETION OF MILESTONE AS PER SECTION 31 OF CGST ACT BUT COMPANY IS RECEIVING ADVANCES FROM XYZ CO, SO WE NEED TO PAY GST ON THIS ADVANCES OR WE MAY ESCAPE FROM LIABILITY ON ADVANCES AS PER SECTION 13(2a).

AS PER MY UNDERSTANDING SECTION SAYS LIABILITY WILL ARISE ON ISSUE OF TAX INVOICE OR ADVANCE PAYMENT WHICHEVER IS EARLIER