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Advance Under GST

GST must be paid on any advance payments received, even if the goods or services have not yet been delivered or rendered. The advance receipt voucher must include details like the supplier and recipient names, GST numbers, invoice details, payment amount, tax rate, and tax charged. Advance payments received must be reported in GSTR-1 under Section 11A, bifurcated between intra-state and inter-state supplies with gross amounts and corresponding tax liabilities.

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107 views2 pages

Advance Under GST

GST must be paid on any advance payments received, even if the goods or services have not yet been delivered or rendered. The advance receipt voucher must include details like the supplier and recipient names, GST numbers, invoice details, payment amount, tax rate, and tax charged. Advance payments received must be reported in GSTR-1 under Section 11A, bifurcated between intra-state and inter-state supplies with gross amounts and corresponding tax liabilities.

Uploaded by

Abrar Sange
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Generally, GST is imposed on a supplier of goods and service at the time of receipt of

payment. However, in some cases, an advance payment is first made by the recipient of
the goods or/and service or both to the supplier. In this article, we will discuss the
applicability of GST on advance payments.
GST on Advance Payment
When a payment is made ahead of its actual schedule such payment is termed as
advance payment, such as making the payment for the goods or service before the
receipt of goods or service. In addition to this, sometimes the supplier of the goods and
service requires an advance payment as a safeguard against non-payment, or to cover
its costs for supplying a product or rendering of a service.
For example, the rent of a banquet hall is Rupees 1,00,000 for a single day
accommodation. To ensure that the booking gets confirm we have to make an upfront
payment of Rupees 15,000 to the owner. This upfront payment is called an advance
payment.
As mentioned above, GST is to be paid at the time of delivery of the goods or
completion of services. However, an exception to this rule is the receipt of advances.
Therefore, If a supplier demands an advance payment before delivering/rendering the
goods or services as the case may be, GST has to be paid on the advance amount
even if the goods have not been delivered or service has not yet been rendered.
GST Advance Receipt Voucher
The advance receipt voucher is required to contain the following details in order to
comply with the GST rules:
 Name, address and GST Identification number of the supplier of the goods
or/and service;
 The advance receipt voucher must contain a consecutive serial number not
exceeding sixteen characters, containing alphabets or numerals or special characters;
 Date of issue;
 Name, address and GST Identification Number, if registered, of the recipient;
 Details of the of goods or services;
 Amount of advance received;
 The rate of tax;
 Amount of tax charged in regard to taxable goods or services;
 Place of supply along with the name of State and its code
 Whether the GST is payable under the reverse charge basis; and
 Signature or digital signature of the supplier or his authorized representative.
Treatment of Advance Received In GST Return
Details of the amount received as the advance are required to be mentioned in sr. no.
11A of the GSTR – 1 return. As it shows the figure of the advance money received in
the tax period for which invoice has not been issued.
Additionally, it is important to note that in sr. no. 11A of the GSTR – 1 return figures of
the advance money received must be bifurcated in two parts i.e. advance money
received against intra-state supplies and advance money received against inter-state
supplies. However, consolidated figures of the advance money received are to be
stated in the same, details of each advance money received need not to be mentioned.
The gross amount of advance money received is required to be mentioned under the
head ‘Gross Advance Received / Adjusted’ and matching tax liability is required to be
reflected under ‘Central’ and ‘State/ UT’ head in case of intra-state supplies and under
‘integrated’ head in case of inter-state supplies.

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