Find
For services, the time of supply under Sec 13 is generally the earlier of invoice and payment, so tax is due on advances received. For goods, tax on advances was removed by notification, so goods advances are not taxed at receipt.
GST
Tax on advances received for services
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Provisions
Sec 13, CGST Act 2017; Sec 37, CGST Act 2017
Analysis
If you received an advance of ₹1,18,000 for a training service, tax of ₹18,000 is due in that month. When you issue the invoice later, adjust the advance in GSTR-1 so tax is not paid twice. Missing advance tax is a common gap between bank receipts and GSTR-1.
Close
- List advances received in the month for services
- Issue a receipt voucher and pay tax on the advance
- Report it in the advances table of GSTR-1
- Adjust it when the invoice is issued
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