GST on Advance Payment Received from Customer

The advance payments received from the customers may 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

  1. Choose the Search for Page or Report icon, enter General Journal or Bank Payment Voucher or Cash Receipt Voucher, and then choose the related link.
  2. Select Customer in account type and select relevant Customer Code, GST customer type and registration number should not be blank on customer master.
  3. Select G/L Account or Bank Account in balancing account type, and select the cash or bank account.
  4. 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 10000 on which 18% GST (i.e. 9% CGST and 9% SGST/UTGST) has to be charged.

  • GST calculation will appear in the Fact Box, as following:

    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, will be as following:

    Particulars Amount
    Bank Account 10000
    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, will be as following:

    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

Tip

In case of Inter-State Advance Payment, IGST will be calculated.

See Also

GST Application of Receipt and Invoice

Note

Can you tell us about your documentation language preferences? Take a short survey.

The survey will take about seven minutes. No personal data is collected (privacy statement).