Updated on: Jul 6th, 2021
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2 min read
Whenever you take advance payment from a customer for a sale that will happen in the future, then there will be a GST levied on that advance receipt too. That’s why you have to issue an advance receipt. That receipt has to contain all the details about your customer and item, except the HSN Code. Remember, after paying a tax on the advance receipt, when you issue a sale bill, you have to insert the full amount of the sale in the bill. But at the end of the bill, you have to show how much the advance was and what tax was paid on it.
Let’s see this as an example: Let’s say you have received an advance of 10,000 rupees and you have to make a sale bill of Rs. 30,000. So here you will have to issue a bill of the entire 30,000 rupees and at the end of the bill, you have to show the 10,000 rupees you received an advance as well the tax on it. In the end, you have to pay tax only on the remaining 20,000 rupees. Here you need to be careful about one thing. If you are not charging your customer the tax on the 10,000 rupees then this 10,000 will be considered with tax.
Watch a Video On How to Create Advance Receipts
Below is a step by step guide pm how to create Advance Receipts:
Let’s understand this one by one:
Advance receipts under GST requires issuing a receipt for advance payments and including those details in the final sale bill. Tax is levied on the remaining amount after deducting the advance payment. It's essential to show the advance amount and tax paid on it in the final bill. Follow a step-by-step guide to create advance receipts on your dashboard.