Latest Query & Reply

Is GST payable on advances received by Real Estate developers?
If yes, what would be the position in case, the transaction is cancelled in future and the advance so received need to be returned?


If the advance is received before the issue of the invoice the time of supply would be the date of receipt of advance. Supplier of services is required to pay GST at the time of receipt of advances.

As per Section 31 (3) (d) of the CGST Act, 2017, a registered person shall, on receipt of advance payment with respect to any supply of  services, issue a receipt voucher or any other document, containing such particulars as may be prescribed, evidencing receipt of such payment.

If the transaction is cancelled in future, the said registered person may issue to the person who had made the payment, a refund voucher against such payment. 

And the amount of GST paid on receipt of advance, can be adjusted against output liability or taxpayer can claim refund for that as well.