Advance received from the customer with GST
Mohan received Advance Rs 118,000 on 1 Jan 2021. from Krishna Traders local trader.
Particular | Amount |
Bank a/c Dr. | 118,000 |
To Krishna Traders | 118.000 |
(being advance received from Krishna) |
Now this advance include 18,000 GST amount which is
CGST 9000
SGST 9000
Now on 31 Jan 2021.
Particular | Amount |
Tax on Advance a/c Dr. | 18,000 |
To Output CGST | 9.000 |
To Output SGST | 9,000 |
(being tax paid in advance) |
When a sale is made
Particular | Amount |
Krishna Traders Dr | 118,000 |
To Sales | 100000 |
To Output SGST A/c | 9,000 |
To Output CGST A/c | 9,000 |
(being sales made ) | |
Particular | Amount |
Output CGST A/c Dr | 9,000 |
Output SGST A/c Dr | 9,000 |
To Tax on Advance A/c | 18,000 |
(being an adjustment of advance) |
Note no GST on advance on goods under GST but on service, it is still applicable.
Thus, advance payment under GST made in respect of the supply of goods would not attract any GST liability. However, the liability of on the advance payments for supply of services would continue to exist.
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