X Ltd can take input on this advance?

X Ltd place order to Y Ltd Rs. 1,00,000, X Ltd need to pay 20% advance i.e. 20,000 but y Ltd asking X Ltd to pay 20,000+GST since You Ltd has to pay GST on that, in this case X Ltd can take input on this advance?

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5 Answer(s)

No cannot take. only after the delivery is complete.

Answered on May 11, 2017.
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Then buyer will not pay tax then it will burden on seller it may increase cost of product? Please suggest me best practice for material long period of lead time like 6months and above?

Answered on May 11, 2017.
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In the case of advance money receive supplier of goods has to pay tax on it and receiver can take credit only after receive the goods. Now here suppier can demand advance money with tax from the receiver of goods. and generate transaction id for the same.

Answered on May 11, 2017.
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Taking input tax credit not possible because One of the essential condition to avail input tax credit is Buyer should Have valid invoice & Receipt of goods. There is no additional cost for buyer & seller because at the time of raising invoice only balance tax to be paid ie. Invoice value tax Minus Advance amount​ tax.This will be taken care by Electronic credit & cash register.

Answered on May 12, 2017.
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No

Answered on May 30, 2017.
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Your Answer

Gen GST