https://help.tallysolutions.com/docs/te9rel61/Tax_India/gst/tax_liability_-_Adv_Rcpts.htm

Tax Liability on Advance Receipts

Related topics

Generating GSTR-1

Filing GSTR-1

e-Return Description

Document Summary

Recording GST Advance Receipts from Customers

When advance is received and an invoice is not recorded against the advance in the same period, the taxable person has to pay tax on the amount of advance received. Over a taxable period, keeping track of the advance received and creating tax liability for such an amount will be a difficult task.

The report Advance Receipt – Tax Liability provided in Tally.ERP 9 will help you get the details of all advance receipts in a period. With this report it is easy to get the details of advance received, invoice created, and liability booked against the total advance amount. Thus, providing you with the details of unbilled advance amount for which liability is not created yet.

To know more about Advance Receipt report, watch the following video:

 

To view the Advance Receipts Summary

1.    Go to Gateway of Tally > Display > Statutory Reports > GST > GSTR-1.

2.    Select Amount unadjusted against supplies under Advance Receipts, and press Enter.

The Advance Receipts Summary report appears as shown below:

The advance receipt amount is listed based on the Place of Supply. The total advance and the unadjusted advance amount are displayed for each place of supply.

Place of Supply: Displays the state name of the parties from whom advance was received.

Advance Received: Displays the total amount received as an advance from parties located in the particular place of supply.

Unadjusted Advance: Displays the advance amount pending for which invoice or liability was not created in the period. The tax payer has to create liability and pay tax for such an unadjusted amount.

Validate Unadjusted Advance and Create Liability

Drill down from any place of supply to view the Advance Receipt – Tax Liability report.

The amount of advance received and the amount for which invoices are not raised against the advance are displayed voucher-wise in this report. The report is divided into three sections, GST Advance Receipts, GST Advance Receipts – Mismatch, and Summary of Tax Liability.

GST Advance Receipts: Under this section, the advance receipt vouchers with tax rate and assessable value are displayed. And, the advances that are partially adjusted by recording sales bills with same tax rates are also displayed.

GST Advance Receipts  - Mismatch: Under this section, the advance receipt vouchers with incomplete tax rate and assessable value details are displayed. And, the advances that are partially adjusted by recording sales with different tax rate are also displayed. Due to the difference in tax rates recorded in advance and sales tax liability is not computed on the advance amount.

Summary of Tax Liability: Under this section, the tax rate-wise break-up of amount received as advance is shown under the following columns:

     Unadjusted Advance: The advance amount for which no adjustment transaction is recorded is shown in this column.

     Liability Booked: The advance amount for which liability is booked by recording a journal adjustment transaction is shown in this column.

     Balance Liability to be Booked: The advance amount pending after booking sales and liability is shown in this column. Tax liability has to be booked for this amount.

     The value from advance receipt transactions with mismatch is shown as an aggregate value without any break-up.

Note: Click F1: Detailed to view the sales and credit note transactions recorded to adjust the amount of advance received.   

To create liability for the pending advance amount

     Click J: Stat Adjustment and record the journal voucher. Click here for the steps on creating journal voucher for increasing tax liability on account of the advance received.

To view vouchers for tax liability already booked

     Click L: Liability Booked. The Liability Booked Against Advance report appears as shown below: