Gst on advance- what to declare in return

Hi,

I have received an advance for supply of goods. Turnover of my company is less than 1.5 crore ruppees. I understand that for such companies GST is payable only at the time of supply of goods. However, my question is, do I need to declare this advance under point 11 of GST quarterly return? If I do, system automatically shows GST calculation and it means I will have to pay GST on that. 

Can experts here guide me if I should declare this advance or enter invoice details only when GST invoice is issued at the time of supply.

Replies (2)

You should declare this advance or enter invoice details only when GST invoice is issued at the time of supply.

Time of supply means the point in time when goods/services are considered supplied’. When the seller knows the ‘time’, it helps him identify due date for payment of taxes.


As per Section 12 of the GST Act, The time of supply of goods shall be the earlier of the following dates, namely:—

(a) the date of issue of invoice by the supplier or the last date on which he is required, under sub-section (1) of section 31, to issue the invoice with respect to the supply; or

(b) the date on which the supplier receives the payment with respect to the supply.

Thus GST on Supply of Goods was payable at time of receipt of advance, if the amount is received before issue of invoice

GST will not be payable at time of receipt of advance in case of outward supply of goods by registered persons having turnover less than 1.50 Crore during last FY, w.e.f. 13th October 2017. However GST on advance is payable if advance received during period 01/07/2017 to 12/10/2017. Not applicable for Composition scheme.


 

I read the above section-

1. The advance in question relates to March-2019 and turnover being less that 1.5 crores, no GST is payable.

2. So does that mean, that advance should not be shown in GST return as well? Because, if I declare that, I will need to pay GST on that. Or is there any way to manually adjust that amount to 0.

3. In due course of time, when I will supply goods, I will issue Invoice of full amount and pay full GST at that time.

Can anyone confirm if my understanding is right?

 

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