2025-VIL-183-AAR
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SGST Advance Ruling Authority

GST – Kerala AAR - Section 12(2)(a) and Section 31(3)(d) of the CGST Act, 2017 - Time of Supply, Issue of tax invoices towards advance payment - Applicant receives payments from customers in multiple stages, including an initial advance, part payments during manufacturing, and final payment upon delivery - Whether the applicant can issue tax invoices upon receipt of advance payments for the supply of goods and pay the corresponding GST, or is required to issue only a receipt voucher for advances and a single tax invoice at the time of delivery - HELD – The Notification No. 66/2017-Central Tax dated 15.11.2017, which provides that all registered persons who have not opted for the composition levy shall pay central tax on the outward supply of goods at the time of supply as specified in Section 12(2)(a) of the CGST Act and furnish returns accordingly. Since the Notification uses the word “shall”, the compliance is mandatory and the time of supply is to be determined as the earlier of the date of issue of invoice or the last date on which the invoice is required to be issued under Section 31. The notification thereby lays down a mandatory procedural rule for suppliers of goods namely, that the supplier shall pay tax at the time of supply as determined by Section 12(2)(a) of the Act - The applicant is not permitted to issue tax invoices at the time of receiving advance or part payment from customers towards the supply of goods - The advances received prior to the actual supply of goods must be documented through a receipt voucher as prescribed under Rule 50. A tax invoice may be issued only at or before the time of removal or delivery of goods, as stipulated under Section 31(1) of the CGST Act – Further, the applicant's proposal to issue a single tax invoice for the total value of the boat at the time of delivery and subsequently issue credit notes to adjust for the earlier invoices raised against advances is not in alignment with the statutory provisions, as the issuance of credit notes is governed by Section 34 of the CGST Act, which permits such adjustment only against valid tax invoices issued for completed supplies and within the prescribed time limits - The applicant must issue receipt vouchers at the time of receiving advances, and a single tax invoice should be issued at the time of final delivery of the goods. The corresponding E-way bill shall be generated against this final invoice, reflecting the entire value of the consignment – Ordered accordingly
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