No GST on Advance Payments for Goods received by Small Taxpayers: CBEC

GST Council Recommends ‘No GST on Advance Payments for Goods received by Small Taxpayers’: CBEC

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.

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Highlights of Recommendations of 22nd GST Council Meeting at New Delhi

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