GST and TDS on Vendor Advance Payments
Liability of paying GST and TDS arises at the time of advance payment to vendor.
Mandatory fields in cash or bank payment voucher
- Choose the
icon, enter Bank Payment Voucher or Cash Payment Voucher, and then choose the related link. - Select Vendor in Account Type field and select relevant vendor code in Account No. field.
- Select G/L Account for cash or Bank Account for bank in Bal. Account Type field, and select relevant cash or bank account in Bal. Account No. field.
- Select relevant TDS Section, GST Group Code, HSN/SAC Code, Location Code on journal line.
- GST on Advance Payment should be marked true.
For example, service amount is INR 20000 and advance payment made to vendor for INR 10000, 18% GST (i.e. 9% CGST and 9% SGST/UTGST) and 10% TDS has to be charged.
GST calculation for Intra-State or Intra-Union Territory transactions will appear in the Fact Box, as following:
Component Amount GST Base Amount 10,000 CGST 900 (10000*9%) SGST 900 (10000*9%) TDS Amount 1000 (10000*10%) On posting of advance payment made to vendor, GL Entries will be as following:
Particulars Amount Vendor Account 10,000 SGST/UTGST Receivable (Interim) Account 900 CGST Receivable (Interim) Account 900 TDS Payable Account -1000 SGST/UTGST Payable Account -900 CGST Payable Account -900 Bank Account -9000
Important
In some cases GST needs to be calculated on the amount excluding GST, provision has been made to handle such scenario. Business user need to fill the TDS Base Value in Amount Excl. GST filed on Bank Payment Voucher, and system will calculate TDS on the mentioned value.
Later invoice for service purchase issued by vendor for INR 20,000, 18% GST (i.e. 9% CGST and 9% SGST/UTGST) and 10% TDS, will be charged, and the advance payment will be applied with the invoice.
Mandatory fields on purchase invoice
- Choose the icon, enter Purchase Invoice, and then choose the related link.
- Select Vendor on Purchase Invoice header.
- Select G/L Account for service on Purchase Invoice line.
- Select TDS Section on Purchase Invoice line.
- GST Group Code, HSN/SAC Code, GST Credit should have a value in G/L Account card.
- Location Code field should not be blank on both Purchase Invoice header and line.
- Apply the advance payment in Applies to Doc. No. field on Purchase Invoice header.
GST calculation will appear in the Fact Box, as following:
Component Amount GST Base Amount 20000 CGST 900 = [1800 (20000 * 9%)] - [900 (10000 * 9%)] SGST 900 = [1800 (20000 * 9%)] - [900 (10000 * 9%)] TDS Amount 1000 = [2000 (20000 * 10%)] - [1000 (10000 *10%)]
GST and TDS will be calculated on the remaining amount, i.e. Invoice Amount - Advance Payment Amount. If advance payment is not applied with the purchase invoice then GST and TDS will be calculated on the whole invoice amount.
On posting the purchase invoice, GL Entries will be as following:
Particulars Amount Vendor Account -19000 SGST/UTGST Payable (Interim) Account -1800 CGST Payable (Interim) Account -1800 SGST/UTGST Receivable (Interim) Account -1800 CGST Receivable (Interim) Account -1800 TDS Payable Account -1000 CGST Payable (Interim) Account 900 CGST Receivable Account 900 SGST/UTGST Payable (Interim) Account 900 SGST/UTGST Receivable Account 900 SGST/UTGST Receivable (Interim) Account 1800 CGST Receivable (Interim) Account 1800 Service Account 20000
Tip
Note: In case of Inter-State Purchase, IGST will be calculated.