As per GST Rule, we need to pay GST on Advance in case of Services
However ,we don't need to pay it in case of goods
 

Question 1

Suppose we are a shopkeeper or a factory and a customer pays us advance in January

Sales Made in Feb

In which month return do we need to deposit GST -Jan or Feb

View Answer

 

Question 2

Suppose we are a shopkeeper or a factory and a customer pays us advance in January

Service Provided in Feb

In which month return do we need to deposit GST -Jan or Feb

View Answer

 

Comparison-Goods and Services

Advance made.jpg

 

What will be the entry of advance in case of Goods

 

Good Advance Entries.jpg

What will be the entry of advance in case of Services

Service Advance.jpg

 

 

 

 

 

 

 

 

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Transcript

Goods Services We pay GST when Sales Made or Amount Received which is earlier If We Receive Advance If We Receive Advance No GST on Advance Full GST when Sales Made We Pay GST on Advance Balance GST we pay on Sales ( Service Providers ) Rule Rule (Date Money Received is not relevant) We pay GST when Sales Made Note Person Receiving Advance have to Issue Advance Receipt Voucher (Shopkeeper, Factory) Advance Received in Jan 2000 Sales Made in Feb 10000 + 5% GST Balance Received in March Goods Entries Jan Bank To Party 2000 2000 No Tax on Advance In case of Goods Feb To Sales To Output CGST 10000 250 We pay Full tax on Sales To Output SGST 250 March Bank To party 8500 8500 Sales Entry Party To Sales Amt Recd Entry Bank To Party Advance Received in Jan 2000 Sales Made in Feb 10000 + 5% GST Balance Received in March Services Entries Jan Bank To Party 2000 2000 Feb To Sales/Services To Output CGST 10000 250 To Output SGST 250 March Bank To party 8500 8500 Party 10500 Tax on Advance 95.2 To Output CGST 47.6 To Output SGST 47.6 ( We pay Tax on Advance) Output CGST Dr 47.6 Output SGST Dr 47.6 To Tax on Advance 95.2 (Balance Tax We pay on Sales after adjusting advance) Amount CGST SGST Total 1904.8 47.6 47.6 2000

About the Author

CA Maninder Singh's photo - Expert in Practical Accounts, Taxation and Efiling
CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 10 years. He also provides Accounts Tax GST Training in Delhi and Pune.