Gst on advance received: tax rate not available

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This query is : Resolved

Elangovan Nagarajan (Querist)

18 March 2019 Background:
We are an Education and Recreation Services Intermediary (Aggregator) bringing institutions and coaching and training centers together with students. Services range from Karate Classes, Math Classes to Swimming, Creche etc., the GST Rates applicable range from 0% to 18%.

We receive the amount in advance from customers and give them credits at the beginning of every month as a subscription. The customer can choose any of the services offered by us. Each session will be a independent service and a given amount [in the form of credits] will be deducted each time customer chooses to subscribe a service. Whenever the credit is exhausted, the customer will recharge credits into his account.

Query:
Few Services are taxed, and few services are exempt, however we will not know at the time of receipt of advance what service the customer is going to avail. Therefore we will not know what is the GST rate on the services at the time of receipt of advance.

Since GST need to be paid on advance received, we need determine tax liability, however it is not available at the time of receipt of advance.

How this tax issue can be resolved, i couldn't find a solution from the books, all suggestions and responses are appreciated.

Thank you in advance

SHUBHAM SHARMA

SHUBHAM SHARMA (Expert)

19 March 2019 Sir,
In accordance with rules of the CGST Act, where at the time of receipt of advance the rate of tax is not determinable , the tax shall be paid at the rate of 18%.
Feel free to ask any further query. You can connect our team on +919462302922, shubham.vnv@gmail.com
Thanks and Regards

CA Shubham Sharma

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