GST & Accounting Tratement in case of Advance Receipts

Ex: Advance received on 20th March of 2021 for Two days in May 2021 Conference hall  Rs: (10,000+ GST18%)=11,800

 At time of Advance receipt ( Suggetion: Invoice has to be raised on or after the event)

Receipt Voucher (20th March 2021)

By Bank A/c                                                11,800
To XYZ Ltd  A/c                                                         10,000
To Output CGST A/c                                                       900
To Output SGST A/c                                                       900

( Being Advance received from XYZ Ltd for the conference hall reserved for the 15,16th May 2021)

Note: Has to be shown in 11A(1), 11A(2) – Tax Liability (Advances Received) of GSTR-1 for the month of March 2021 and amount to be paid in March 2021 Month's GSTR-3B.

On 15,16th May 2021 (i.e. Date of Event)

By XYZ Ltd A/c                                    10,000
To (Rental Income) Sales A/c                                10,000

Note:Has to be shown in 11B(1), 11B(2) – Adjustment of Advances of GSTR-1 for the month of May 2021.

In case of Cancellation of Agreement or Contract of advance received

By XYZ Ltd A/c                                10,000

By Output CGST  A/c                            900  (Better to maintain separate Ledger)

By Output SGST  A/c                            900 (Better to maintain separate Ledger)

To Bank                                                               11,800

GST Return Treatment

In case GST is paid by the supplier on advances received for an event which got cancelled subsequently and for which no invoice has been issued, he is required to issue a “refund voucher”.

The taxpayer can apply for refund of GST paid on such advances by filing FORM GST RFD-01 under the category “Refund of excess payment of tax”.