GST and TCS on Advance Customer Payments
Assessee is liable for paying GST and TCS at the time of receiving advance payment from customer.
Mandatory fields in cash or bank receipt voucher
- Choose the icon, enter Bank Receipt Voucher or Cash Receipt Voucher, and then choose the related link.
- Select Customer in Account Type field and select relevant customer code in Account No. field.
- Select G/L Account for cash or Bank Account for bank in Bal. Account Type field, and select relevant cash or bank account in Bal. Account No. field.
- Select relevant TCS Nature of Collection, GST Group Code, HSN/SAC Code, Location Code on journal line.
- GST on Advance Payment should be marked true.
For example, service amount is INR 20000 and customer made an advance payment of INR 10,000, 18% IGST and 1% TCS has to be charged on the advance payment.
GST Calculation will appear in the Fact Box, as following:
Component Amount GST Base Amount 10,000 GST Transactional Value 8,474 (10000*100/118) IGST Amount 1525 (8,474*18%) TCS Amount 100 (10,000*1%)
On posting of advance receipt from customer, GL Entries will be as following:
Particulars Amount Bank Account 10000 IGST Payable (Interim) Account 1525 IGST Payable Account -1525 TCS Amount -100 Customer Account -9900
Later sales invoice for services is issued to the customer for INR 20,000, 18% IGST and 1% TCS has to be charged on the invoice amount, and the advance receipt from customer will be applied with the invoice.
Mandatory fields on sales invoice
- Choose the icon, enter Sales Invoice, and then choose the related link.
- Select Customer on Sales Invoice header.
- Select G/L Account for service or Item for goods on Sales Invoice line.
- Select relevant TCS Nature of Collection on Sales Invoice line.
- GST Group Code, HSN/SAC Code, GST Credit should have a value in G/L Account or Item card.
- Location Code field should not be blank on both Sales Invoice header and line.
- Select the advance payment in Applies to Doc. No. field on Sales Invoice header.
GST calculation will appear in the Fact Box, as following:
Component Amount GST Base Amount 20000 IGST 2075 = [3,600 (20,000 * 18%)]-[1525 (8,474 * 18%)] TCS Amount 136 = [236 (23,600 * 1%)] - [100 (10,000 * 1%)]
GST and TCS will be calculated on the remaining amount, i.e. Invoice Amount - Advance Payment Amount. If advance payment is not applied with the sales invoice then GST and TCS will be calculated on the whole invoice amount.
On posting of sales invoice, GL Entries will be following:
Particulars Amount Customer Account 23736 IGST Payable Account -3600 Sales Account -20000 TCS Payable Account -136 IGST Payable Account 1525 IGST Payable (Interim) Account -1525
In case of Intra-State Sale, CGST and SGST/UTGST will be calculated.