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TMI BlogReversal under Rule 42/43X X X X Extracts X X X X X X X X Extracts X X X X ..... Dear Sir, Advance received for Services in the month of March 2018 (GST discharged) and actual invoice raised in July 2018. For the reversals under Rule 42 / 43 , in which year turnover to include this transaction- 2017-18 or 2018-19 ? Request you to provide your expert views along with relevant section and rules. Also, if this is to be included in year of advance receipt, then why how t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o estbalish the nexus between section 7 - supply and section 13 - time of supply. - Reply By KASTURI SETHI - The Reply = The subject transaction will be accounted for in the year 2017-18. You want to correlate Section 7 (Scope of supply) and Section 13 (Time of supply). Whether required ? Section 7 is not subject to Section 13 and vice versa. Moreover, t ime of supply and accounting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... treatment both are different concepts. Pl. elaborate your query. - Reply By Sachin Jain - The Reply = Thank you sir for your prompt response. Basically i wanted to understand why this advance will be included in the turnover of 2017-18. Is this because supply definition says supplies made or agreed to be made ? If this is the understanding, then whether advances received for taxable go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ods/ exempted goods will also be included in the turnover in which advance is received ? - Reply By KASTURI SETHI - The Reply = Advances received against taxable goods are not subject to GST. Only advances received against taxable services are subject to GST. See the difference. - Reply By Sachin Jain - The Reply = Yes, i understand that advance on goods is not taxable. That's why i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asked that what's the nexus between section 7 and section 13 . As per my understanding, anything to be added in turnover definition( for the purpose of rule 42 / 43 reversals) must first be termed as supply. So first we need to prove that advance received is a supply- for services as well as goods. Further, section 13 (time of supply) only specifies the time at which we need to pay t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he liability. Do we mean to say that section 13 determines when a supply can be treated as supply for the inclusion in turnover definition. i hope am able to explain my doubt. - Reply By Ganeshan Kalyani - The Reply = Section 13(2)(b) states that the date of receipt of payment is the time of supply if the invoice is not raised within the period prescribed. So, the turnover of service shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be included in the year in which the advance is received. However, as per accounting the same will be considered in the year in which the invoice is raised. Hence, these two different treatment will form part of reconciliation. In annual return, such scenarios are required to be disclosed. Thanks. - Reply By CSSANJAY MALHOTRA - The Reply = Reversal has to be made in FY 2018-19 and Turnover is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be considered when the Supply invoice is raised, which in ur case is 2018-19. Refer proviso of Sec 2(31) as follows: 31) consideration in relation to the supply of goods or services or both includes Provided that a deposit given in respect of the supply of goods or services or both shall not be considered as payment made for such supply unless the supplier applies such deposit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as consideration for the said supply; - Reply By Ganeshan Kalyani - The Reply = Advances are just a deposit unless the same is adjusted against a supply of goods or services. Sanjay Sir your view is clear. - Reply By Sachin Jain - The Reply = Note: Advances are adjusted in subsequent months from the supplies made. - Reversal under Rule 42/43 - Query Started By: - Sachin Jain Dated:- 16- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5-2019 Goods and Services Tax - GST - Got 8 Replies - GST - Discussion Forum - Knowledge Sharing, reply post by an expert, personal opinion Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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