In re Uttar Pradesh Avas Evam Vikas Parishad (GST AAAR Uttar Pradesh)
Now coming to the value of taxable supply in case of advance payment, we observe that explanation given in the sub Section 2 of Section 13 of the CGST Act, 2017 provides that-:
“Explanation- For the purpose of clause (a) and (b)-
(i) the supply shall be deemed to have been made to the extent it is covered by the invoice or, as the case may be, the payment.”
We also observe that the issue regarding advance payment received has been addressed in the flyer issued by the Central Board of Indirect Taxes and Customs
“Advance received for future supply” under GST. Para 2 of the said flyer deals with the advance payment, which is as under:-
“As per the explanation 1 to Section 12 of the CGST Act, 2017 a “supply” shall be deemed to have been made to the extent it is covered by the invoice or, as the case may be, the payment. For instance, an advance of Rs. 10 lacs is received for a supply worth Rs. 1 crore to be made in future. The time of supply to the extent of advance received i.e. Rs.10 lacs shall be at the time of receipt of advance and for the balance amount of Rs. 90 lacs, it shall be determined with reference to date of issue of invoice and other parameters.”
From the above discussion we observe that issue has been aptly clarified and the Authority of Advance Ruling has correctly ruled that the value of the supply, on the advance payment received by the applicant, will be the amount of advance received by the applicant towards that particular work/supply.
