GST on advance payment received from customer
The advance payments received from the customers might need to be reported in GSTR-1 along with GST Rates.
Process of GST calculation on advance payment from customer has been explained in this document.
Create a general journal or a bank or cash receipt voucher
- Choose the
icon, enter General Journal or Bank Payment Voucher or Cash Receipt Voucher, and then choose the related link. - Select Customer in account type and select relevant Customer Code, GST customer type and registration number shouldn't be blank on customer master.
- Select G/L Account or Bank Account in balancing account type, and select the cash or bank account.
- GST on Advance Payment field needs to be activated in General Journal Line for computation of GST on Advance Payment. In addition, GST Group code and GST Place of Supply are to be entered for computation of GST.
For example, advance payment received from customer for INR 10,000 on which 18% GST (i.e. 9% CGST and 9% SGST/UTGST) has to be charged.
GST calculation appears in the Fact Box, as follows:
Component Amount Advance Payment 10,000 GST Transitional Value 8,474 (10000*100/118) CGST 763 (8,475*9%) SGST/UTGST 763 (8,475*9%) GL Entries for advance payment received from customer, as follows:
Particulars Amount Bank Account 10,000 CGST Payable (Interim) Account 763 SGST/UTGST Payable (Interim) Account 763 CGST Payable Account -763 SGST/UTGST Payable Account -763 Customer Account -10000
Reversal of advance payment received from customer
If the customer advance needs to be corrected or the entry is wrongly posted, in such a case the entry can be reversed and new entry can be created.
Reversal GL Entries for advance payment received from customer, as follows:
Particulars Amount Customer Account 10000 CGST Payable Account 763 SGST/UTGST Payable Account 763 CGST Payable (Interim) Account -763 SGST/UTGST Payable (Interim) Account -763 Bank Account -10,000
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In case of Inter-State Advance Payment, IGST will be calculated.