GST on Advance Payments: Everything A Freelancer Must Know



Quick Summary
As a freelancer, it's crucial to understand that GST is payable on advance payments received from clients. The liability to pay GST arises at the 'Time of Supply', which is typically the date you receive the payment if it's before the invoice date. You'll need to issue a receipt voucher and calculate the GST on the advance amount, remembering that clients can only claim input tax credit once the services are rendered.

What? So youre saying I must pay GST on advance payments? Why so? Deepika, a GST-registered freelancer, designs social media posters and other marketing materials for prominent clothing brands. She receives 40% payment from clients in advance and the remaining 60% at the end of the project after raising an invoice. During our chitchat, I asked him, Since you receive advances from clients, do you pay GST on it? She was taken aback by the question. All this while, she assumed shed have to
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About the Author

Content Writer

Tax Consultant | GST Income Tax Advisor | Content Writer | Speaker Some of the prominent startups companies I have been associated with - 1. Avalara Inc 2. ClearTax 3. Masters India 4. Tax2win 5. GST Professionals 6. Especia Associates LLP I advise on Income Tax and GST matters. I advise on ho ... Read more

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