on 04-10-2017 6:30 PM
Dear Sir,
As per GST India law, at the time of advance receipt now recipient is required to pay GST . In milestone based scenario , the advance may be received from customer in multiple phases against a customer order .
Subsequently at the time of partial/full billing , the advances received need to be adjusted on proportionate basis .
Regarding the GST Tax applicability , I am confused on following points and seek help from the expert members :
Kindly guide us pl.
With Regards
BV Mittal
As per the clarification issued by the GST Council on 3rd June 2017, following refinements have emerged;
The tracking of advances would be confined only to the following;
- Advances received during the tax period and not billed during the same tax period
- Advances received and knocked off in different tax periods
Following are the tax compliances;
1. Receipt vouchers have to be generated
2. Payment of GST on the advances received based on the following options;
- Option A: HSN based GST rates along with "Place of Supply"
-Option B : Where HSN and place of supply is not determinable, IGST @ 18% <This might be relevant still where "PoS" is not known>
3.Uploading of returns on the above logic for "outward supply"
Commercial aspects on the Advance treatment:
- Advance received can be treated as including GST or entity which is a supplier can bear the cash flow on account of GST by treating the amount as 100% Advance. But, such intention has to be documented unambiguously.
Technical aspect on the Advance:
- Order to invoice matching would be one of the ideal method of tracking. This would result in no carry forward or partial liability issues. However, this may require a discipline of Confirmed order and remitting the amount exactly required for billing.
- Escrow kind of account where fund lying in such account is appropriated exactly a moment after the billing can be explored
- Unique identify for each transaction of advance
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Dear All,
Based on the representation of various industries in terms of difficulty in tracking advances and linking to invoice, GST lalw has made the following amendments during last 2 months;
1. Provisions relating to GST liability on Advance for Goods withdrawn
2. On Services, GST would be payable for services (This provision was applicable even under the earlier regime of Service tax)
Hope, this would give a sigh of relief to the industry and also to the Software industry.
Regards
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How this can be mapped into SAP
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Hi Balachandar Natarajan,
Thanks for reply , but how we can mapped in SAP. If you have any process document pls share with us.
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