Method of invoicing for service which receive 100% advance

1107 views 5 replies

Harish Desai

Director

65 Points Joined August 2010

We offer Web Development Services which include Domain Registration, Hosting and Web Development etc.

Before GST regime, we used to send Invoice to customer in advance ie. before the services start. We get 100% advance in some services like domain registration and hosting and website maintenance.

In GST regime how to do this invoicing?

If we generate invoice but client refused to pay what would happen? Are we still supposed to pay and then ask for reimbursement if client doesn't pay. How can this situation be avoided? What would be the right method/system of invoicing?

My query

Let's say I raise an Invoice of Rs. 1180 (Rs. 1000/ + Rs. 180 (18% GST)) which is 100% advance on 18-7-2017 for service that would start on Aug 23, 2017. Client pays on Aug 22.

Questions:

1) Am I supposed to upload invoice on Aug 10 and pay GST of Rs. 180/- on Aug 20 even though I have not received the payment from the client.

2) What would happen if I pay GST but client cancels the order or just refuses to pay later. How can I recover Rs. 180/-

3) What if the service starts on Aug 23 and client pays on Aug 25.

4) In same invoice if one service starts on Aug 23 and other service starts on Sept 26, when and how do I generate Invoice or do I have to generate 2 separate invoices for service starting on Aug 23 and Sept 26.

Thanks in advance.

Harish

Replies (5)

Jayant

Accounts

191 Points Joined April 2017

You raise Proforma Invoice and not final invoice before payment is realised. Raise final Tax Invoice after payment is realised.

Sandeep Upadhyay

1518 Points Joined March 2017

Advance amount received is shown in advance voucher and GST in deducted on advance

Advance is adjusted against final invoice

If amount is refunded then issue refund voucher

Harish Desai

Director

65 Points Joined August 2010

Thanks Mr. Sandeep and Mr. Jayant

Need more clarification.

Does it mean, I should do following.

Step 1 - I issue a Proforma Invoice

Step 2 - On receiving advance payment, I issue a Advance Voucher. (Normally we get 100% advance)

Step 3 - Once service starts, I issue a Final Invoice.

- Harish

Sandeep Upadhyay

1518 Points Joined March 2017

@ Harish
1 not require

2 issue advance reciept voucher deducting GST The receipt voucher should contain Name of supplier, address, GST number, unique alphanumeric receipt voucher number of less than 16 characters, date of issue, name of the person who gave advance, his address, GST number, descripttion of goods or services, amount of advance, rate of GST, amount of GST, and signature of supplier. Also at the time of filing of GST return the details of such receipts are to be mentioned in the return.

3 Issue final invoice
Supplier will prepare a tax invoice after supplying of goods or services and deduct the amount of advance received from it and will charge GST on remaining amount