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:
- Name, address, and GSTIN of the supplier
- Serial number
- Date of its issue
- Name, address and GSTIN or Unique Identity Number, if registered, of the recipient
- Description of goods or services
- Amount of advance taken
- Rate of tax (central tax, State tax, integrated tax, Union territory tax or cess)
- Amount of tax charged in respect of taxable goods or services (central tax, State tax, integrated tax, Union territory tax or cess)
- 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
- Whether the tax is payable on reverse charge basis
- Signature or digital signature of the supplier or his authorised representative:
Exceptions for issue of Receipt Voucher –
- When at the time of receipt of advance the rate of tax is not determinable, the tax will have to be paid at 18%
- 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.