Law Legends


GST on Advance Payment

Time of supply is very important to determine the liability of GST , on the basis of which tax liability is determined when GST is to be paid .


  1. Advance in case of Supply of Goods : -

Notification no. According to 66/2017- Central Tax , where goods are to be supplied by the supplier , in respect of which any advance amount is received , then in such a case there is no need to pay GST on receipt of advance amount .

The liability to pay GST will arise only when the goods are actually being supplied ( Invoice has been issued ) .

But if a person has opted for the Composition Scheme , then he will not get the benefit of the notification mentioned above . Meaning, if advance amount is received by the composition dealer , then GST liability arises on receipt of advance amount .


  1. Advance in case of supply of service:-

If advance amount is received in respect of supply of service , then liability to pay GST arises when the advance amount is received .


Note :

But if an amount up to Rs 1000 is received , then in such a case the service provider has the option to pay the GST either at the time of receiving the advance or when the service is actually being provided.


What The amount of GST paid on advance Will

the ITC recipient get it at the same time ?

On advance amount ITC will not be available to the recipient after paying GST . ITC will be available to the recipient when the service is actually provided to the recipient by the supplier . And the information of that supply in GST Return Has been furnished .


advance amount declared in GST return ?

On receipt of advance amount by the supplier , Details of advance amount received will have to be declared in Part –11A of GSTR –1 . If advance amount has been received from different persons , then there will be no need to mention them separately , the total cumulative amount will be declared together .

But the advance amount received in respect of Inter-state supply and Intra - state supply will be segregated separately .

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