Receipt Voucher in GST: Meaning, Particulars and Provisions

It’s a general business practice where the supplier receives an advance from its customers against supply of any goods or services. When such advance money is received by the supplier, he issues a “Receipt Voucher” acknowledging the receipt of advance money. Goods & Service Tax laws contains the provisions regarding the manner “Receipt Voucher” should be prepared and its impact on GST payable by the taxpayer.  This article answers several questions based on the provisions of GST in respect of advances received by the supplier:

• What is a Receipt Voucher in GST
• Whether GST is payable on advance received from the customers
• When is GST payable on advances received from the customers
• What are the particulars to be furnished in the Receipt Voucher
• What if the rate of tax or place of supply is not determinable at the time of receiving advance payment?

What is a Receipt Voucher in GST?

• A Receipt Voucher is a document issued by the supplier of goods or services for an advance money received by him towards supply of goods or services.
• Section 31(3)(d) requires that a registered person shall issue a receipt voucher or any other document containing the prescribed particulars evidencing the receipt of any advance payment.
• The particulars to be furnished in the “Receipt Voucher” are prescribed by Rule-50 of the CGST Rules, 2017.
• It should also be kept in mind that issuing a “Receipt Voucher” is mandatory. Where advance money is received and supply is made in the same month, even then issuing a receipt voucher is must.

Whether GST is payable on advance received from the customers?

• Initially when the GST was implemented from 01^st July 2017, it was mandatory to pay GST on the advance consideration received from the customer on supply of goods or services on a future date.

• However, with respect to supply of goods, the requirement to pay GST on advance receipts was dispensed vide Notification No. 66/2017- central tax dated 15-11-2017.

• But the similar relaxation has not been given in the case of service providers. As such, the service providers are still liable to pay GST on advances received from the customers irrespective of the fact whether the services have been already provided or not.

When is GST payable on advances received from the customers?

Under GST, the liability to discharge GST is based upon the time of supply of goods or services made by the taxpayer. In general, the time of supply is the earliest of issuance of invoice or receipt of payment. Therefore, in case of advance received for any supply, time of supply is fixed at the point when advance is received, irrespective of the fact whether the supply is made or not. Accordingly, GST needs to be paid with reference to the time at which the advance is received.

Suppose, an advance is received in December 2023 for Rs. 10 Lakhs against a supply of services worth Rs. 1 crore to be made in future. The services are provided to the customer in February 2024 and invoice issued and the balance payment of Rs. 90 lakhs received in February 2024. In this example, the time of supply for Rs. 10 Lakhs shall be the time when such advance payment is received i.e. December 2023 and GST on such Rs. 10 Lakhs to be paid while filing GSTR-3B of December 2023. GST on balance Rs. 90 Lakhs shall be paid while filing GSTR-3B of February 2024.

The supplier shall issue tax invoice for full supply of services in February 2024 i.e. Rs. 1 crore and while depositing tax in February 2024, adjust the tax already deposited on advances with only net amount getting reflected in Table 3.1(a) i.e. “outward taxable supplies” in GSTR-3B.

Further, the amount of advances received and later adjusted is also shown in Form GSTR-1 under part I of Table 11 i.e. “consolidated statement of advances received/ advance adjusted in the current tax period”.

What are the particulars to be furnished in the Receipt Voucher?

As per the Rule-50 of the CGST Rules, following particulars should be furnished in the Receipt Voucher:

• Name, address and GSTIN of the supplier
• A unique consecutive serial number not exceeding 16 characters in one or multiple series
• Date of issue of Receipt Voucher
• Name, address and GSTIN (if registered) of the recipient
• Description of goods or services
• Amount of advance taken
• Rate of tax (central tax, state tax, integrated tax, union territory tax or cess)
• Amount of tax charged calculated on the basis of rate of tax as above
• Place of supply along with the name of state and its code, in case of an inter-state transaction
• Whether the tax is payable on reverse charge basis (Yes/No)
• Signature or digital signature of the supplier or his authorised representative

Note: Please note where the receipt voucher is issued digitally or in electronic mode, there is no requirement of signature or digital signature.

 What if the rate of tax or place of supply is not determinable at the time of receiving advance payment?

This may happen that a taxpayer (supplier) receives an advance payment from the customer but the rate of tax and nature of supply is not known at the time advances are received. Rule 50 of CGST rules contains a proviso which gives answer for this confusion. According to the said rule:

• When tax rate is not determinable at the time of receipt of advance: GST shall be paid @ 18%
• If the nature if supply is not determinable: It shall be treated as an inter-state supply and accordingly IGST shall be paid on advance money received.

Disclaimer: The above article is meant for educational purposes only and has no legal or corroborative value. Taxwink is not responsible for any loss or damage caused to any person from the use of information contained in this article. Readers are therefore, requested to act diligently and under consultation with any professional before applying the information contained in this article.