CBEC Notifies Exemption for All Taxpayers (Except Composition Dealers) from GST Payment on Advance Received for Supply of Goods
The CBEC has issued Notification Exempting All Taxpayers (except Composition Dealers) from GST Payment on Advance Received for Supply of Goods, in line with recommendations of the GST Council Meeting held on 10 Nov. 2017, as under:
G.S.R… (E):— In exercise of the powers conferred by section 148 of the Central Goods and Services Tax Act, 2017 (12 of 2017) (hereafter in this notification referred to as the said Act) and in supercession of notification No. 40/2017-Central Tax, dated the 13th October, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R.1254(E), dated the 13th October, 2017, except as respects things done or omitted to be done before such supercession, the Central Government, on the recommendations of the Council, hereby notifies the registered person who did not opt for the composition levy under section 10 of the said Act as the class of persons who shall pay the central tax on the outward supply of goods at the time of supply as specified in clause (a) of sub-section (2) of section 12 of the said Act including in the situations attracting the provisions of section 14 of the said Act, and shall accordingly furnish the details and returns as mentioned in Chapter IX of the said Act and the rules made thereunder and the period prescribed for the payment of tax by such class of registered persons shall be such as specified in the said Act.
GST Council Recommends ‘No GST on Advance Payments for Goods received by Small Taxpayers’
GST Council, in its 22nd Meeting on 6 Oct. 2017 has decided and recommended that there should be No GST on Advance Payments received for Supply of Goods by Small Taxpayers having aggregate annual turnover of upto Rs. 1.5 crores.
The requirement to pay GST on advances received is also proving to be burdensome for small dealers and manufacturers. In order to mitigate their inconvenience on this account, it has been decided that taxpayers having annual aggregate turnover up to Rs. 1.5 crores shall not be required to pay GST at the time of receipt of advances on account of supply of goods. The GST on such supplies shall be payable only when the supply of goods is made.
It may be noted that Section 12/ 13 of the CGST/ SGST Acts provides that the liability to pay tax on goods or services shall arise at the earliest of the time of issue of invoice or time of receipt of payment (including advance). Therefore, a taxpayers is required to pay tax in cases where advance is received, i.e. even before supply of goods or services, which is quite difficult to comply with by small businesses.