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Itc on advance

Abhishek Saurav (34 Points)

01 January 2019

I have paid 12 month AMC in advance and the supplier issued the invoice for the same , can I take itc on full value

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8 Replies

pritesh (CA Final student) (7101 Points)
Replied 01 January 2019

No you have to take iTC Month by month

Jatin (Accountant) (3479 Points)
Replied 01 January 2019

You can take full ITC, no restrictions

pritesh (CA Final student) (7101 Points)
Replied 01 January 2019

Normally, ITC is taken on basis of ‘Electronic Credit Ledger’. However, if advance
payment was made before receipt of goods and services, input tax credit cannot be
taken as goods and services are not received.
At the time of payment of GST on advance, the supplier of goods and services cannot
issue tax invoice. He has to issue only ‘receipt voucher’.

Input tax credit is available only if goods or services are received with invoice document.

Jatin (Accountant) (3479 Points)
Replied 01 January 2019

You can take full ITC on Prepaid expense due to you already received invoice & made payment

@ Pritesh Ji,

If some one paid prepaid expenses for 5 years on franchisee fee to Franchisor & recd invoice & payment done

Can he take ITC in single take

Ravi SADhiyan (Practice) (4510 Points)
Replied 01 January 2019

Originally posted by : Jatin
	You can take full ITC on Prepaid expense due to you already received invoice & made payment @ Pritesh Ji, If some one paid prepaid expenses for 5 years on franchisee fee to Franchisor & recd invoice & payment doneCan he take ITC in single take

Dear Jatin

Mr. Pritesh G is right becuase in advance payment under gst Receipt voucher is issued intstead of Tax Invoice

And Dear this payment is not prepaid expenses

Prepaid exp, means an expenses which is related two F.Y. whether it is paid or not

Pankaj Rawat (GST Practitioner) (55037 Points)
Replied 02 January 2019

As per Section 13 CGST Act , the time of supply in case of services is ... earliest of following :
Date of invoice issued
Payment Reced .
Provision in books
& as per querist , he gots the invoice & the payment is also made by him. But... As per section 16 (2)(b) : he has reced. the goods or Services .

Hence in the case the querist has not received the services . so the supplier has to treat such payment as advance & Raise the Receipt Voucher as per Rule 50

Jatin (Accountant) (3479 Points)
Replied 02 January 2019

Thank you Mr. Ravi & Pankaj,

Supplier already issued tax invoice with details of period for 01.07.17 to 30.06.22 & receipient already made payment, intend to use services for furtherance to business, why he can't take ITC in single take

Pankaj Rawat (GST Practitioner) (55037 Points)
Replied 02 January 2019

Dear Jatin Section 16 CGST Act lays the Condition for ITC to be claim & one of the condition clause (b) says that the Input credit can be claim if the Recepient has reced the Goods & Services. Now lets take an example : if suppose on 31/3/18 you got the invoice from mumbai supplier & your business place is delhi & Goods reced by you on 3/04/2018 , can you take the input of that invoice in march18 ??? No wont be ... As per gst return in GSTR 2 there is an option of pending button as you have click that button & the bill will be roll over to april month & there you can select the same & can claim ITC (in april18)