What should a taxpayer do when he receives money against Invoice already raised?

The taxpayer is required to issue a Receipt Voucher.  Also when a registered person receives an advance, the registered person is required to issue a receipt voucher. This voucher is the proof that payment has been received.

A supplier of services is also required to calculate GST on the advance received and pay it to the government.

Note: A supplier of goods is not required to pay GST on advances.

For example –

Mr. A entered into a contract with B to supply some services worth Rs 20 lakh. GST applicable to these services is 18%. An advance of Rs 10 lakh is given by B to A

As advance is received by Mr. A, he will have to issue a Receipt Voucher of Rs 10 lakh.

A will also have to pay GST as follows –

Total GST Payable – Rs 10 lakh X 18% = Rs 152542                                                                                            100% + 18%                        

Amount of CGST @ 9%  = Rs 76271

Amount of SGST @ 9%  = Rs 76271

Format of Receipt Voucher –

The format of Receipt Voucher has been provided by the CGST Rules, 2017:

1. Name, address, and GSTIN of the supplier
2. Serial number
3. Date of its issue
4. Name, address and GSTIN or Unique Identity Number, if registered, of the recipient
5. Description of goods or services
6. Amount of advance taken
7. Rate of tax (central tax, State tax, integrated tax, Union territory tax or cess)
8. Amount of tax charged in respect of taxable goods or services (central tax, State tax, integrated tax, Union territory tax or cess)
9. Place of supply along with the name of State and its code, in case of a supply in the course of inter-State trade or commerce
10. Whether the tax is payable on reverse charge basis
11. Signature or digital signature of the supplier or his authorised representative:

Exceptions for issue of Receipt Voucher –

1. When at the time of receipt of advance the rate of tax is not determinable, the tax will have to be paid at 18%
2. When during receipt of advance the nature of supply is not determinable the nature of supply shall be deemed to be interState supply.

How to Generate a Receipt Voucher?

A receipt voucher can be generated on ClearTax GST software. ClearTax GST makes sure that the Receipt Voucher is generated as per format specified by the government.