In case of Receipt of advance by the Supplier from a Receiver, is the supplier liable to pay tax on such an advance amount under GST ?
Yes, Supplier is liable to pay tax on advances received from Receivers for the supply of goods and services and report the consolidated advance received details in month in which payment is received. The amount of advances to be reported in GSTR-1 is net off the amount for which invoices have already been issued and the value reported in the same return in other sections.
How is the tax paid on advance payments adjusted against the invoice(s) issued in the subsequent tax period(s)?
The taxpayer has to declare the advance that has to be adjusted in the tax period in which advance is received. Subsequently when invoice is issued,then taxpayer can adjust the tax liability of the invoice issued of that tax period, in the GSTR-1 of that period. This can be shown in the advance adjustment table of GSTR-1.
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