QUERY - GST ON ADVANCE RETURNED BACK TO CUSTOMER - PRACTICAL APPROACH
GST IMPLICATIONS ON REFUND OF ADVANCES RECEIVED WITHOUT FURTHER SUPPLY ISSUE: M/S. ENTITY (REGISTERED WITH GST) has entered into agreement for construction and sale of Flat to a Customer. An amount of Rs.100lacs in FY 2019-20 and Rs.25lacs in FY 2020-21 were received by ENTITY (REGISTERED WITH GST) and same has been disclosed in the GST returns as advances in respective months. Subsequently in the FY 2020-21, the Customer wishes to cancel the said agreement and requesting refund for the said amount. M/s. ENTITY (REGISTERED WITH GST) require clarifications whether GST amount deposited to the government for Rs.5lacs in FY 2019-20 has to be deducted from the refund amount. RULE: As per sec.31 (3)(d) , a registered person shall, on receipt of advance payment with respect to any supply of goods or services or both, issue a receipt voucher or any other document, containing such particulars as may be prescribed, evidencing receipt of such payment. As per Sec.31