No GST on Advance Receipts against Outward Supply of Goods – Common Sense Prevails
In a welcome step, it has been notified that GST shall be payable only at the time of invoice as per Section 12(2)(a) of CGST Act,2017 for all outward supply of goods for all assesses irrespective of taxable turnover.This is a welcome step and has made situation now similar to earlier vat laws as under earlier vat regime also, the vat was payable on invoice event and not advance event.
Note that the benefit of this is only extended to goods and not services as for services it was the earlier of payment or invoice even in the earlier service tax Regime.
Note that Section 12(2) says,
The time of supply of goods shall be the earlier of the following dates, namely:-
(a) the date of issue of invoice by the supplier or the last date on which he is required, under sub-section (1) of section 31, to issue the invoice with respect to the supply; or
(b) the date on which the supplier receives the payment with respect to the supply:
(For Purpose of Outward supply of goods in case of registered persons not under composition scheme, the payment of tax will be collected only as per (A) above and not earlier of (A) or (B). Further, the invoice should be prepared within the time limits of Section 31 or else the time limit will become the point of tax due)
Vide Notification 40/2017 – Central Tax dated 13th October, 2017, this benefit was earlier allowed only to registered persons whose aggregate turnover in the preceding financial year did not exceed one crore and fifty lakh rupees or the registered person whose aggregate turnover in the year in which such person has obtained registration is likely to be less than one crore and fifty lakh rupees and who did not opt for the composition levy under section 10 of the said Act.
Now, Vide Notification No. 66/2017 – Central Tax dated 15th November, 2017 the benefit has been allowed to all registered person who did not opt for the composition levy under section 10 of the said Act.
The Bare Text of Notification is as under
G.S.R. 1422 (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.
[F. No. 349/58/2017-GST(Pt)]
(Dr.Sreeparvathy S.L.)
Under Secretary to the Government of India
