Assuming that there is a software service company and one of its buyer in another state releases a purchase order for a software service (the payment terms are within 60 days). How or in what way is one supposed to generate a Tax Invoice? If in GSTR-1 one shows that a GST Invoice was released to BUYER for their Purchase Order then if the payment is supposed to be made after 2 months what would one be doing in GSTR-3 of the current month where the taxes have to be paid? How can one go about and pay tax on payment that is supposed to be received in the future? Should the seller do the following: 1. Make GSTR-1 filing and show the Invoice released for Purchase Order 2. In GSTR-3 filing pay taxes in advance for the purchase order (even though the payment is yet to be received)? Wouldn't this make the seller pay taxes for payments that are yet to be received from their own pocket? Also if a software service is provided for a company outside the country and they make a payment via some International payment gateway is GST applicable on payment received internationally via foreign exchange.
Hi
Taxes have to be paid as invoice is issued.
Because, as per the law the time of supply of services shall be the earlier of the following dates:-
(a) The date of issuing invoice
OR
(b) The date of receipt of payment
-whichever is earlier
The export of services are zero rated supplies and hence no gst has to be paid.
Hi,
1. Yes seller has to show it as a supply and make tax payments.
2. Yes.
Yes, it will make seller to pay taxes from his own pocket but in a similar way seller can get ITC for his purchases for which he has not made payment to suppliers.
Please feel free to call/ revert in case you need more clarity.
Thanks and regards
Abhishek Dugar
CA CS B.Com
No, exports are zero rated. So you have enough an option to export without payment of GST under a bond/LUT.
If in GSTR-1 one shows that a GST Invoice was released to BUYER for their Purchase Order then if the payment is supposed to be made after 2 months what would one be doing in GSTR-3 of the current month where the taxes have to be paid?
YES GST TO BE PAID
Should the seller do the following:
1. Make GSTR-1 filing and show the Invoice released for Purchase Order.....YES
2. In GSTR-3 filing pay taxes in advance for the purchase order (even though the payment is yet to be received....
Wouldn't this make the seller pay taxes for payments that are yet to be received from their own pocket? YES PAY FROM OWN POCKET
Also if a software service is provided for a company outside the country and they make a payment via some International payment gateway is GST applicable on payment received internationally via foreign exchange.
YES, IN GST...EXPORT IS LIABLE TO PAY IGST AND YOU CAN CLAIM REFUND FOR THE SAME
Hello,
Yes, you will be liable to make the payment in GSTR-3 even if the amount is yet to be received by the service provider. The same was the case under VAT Laws and Service Tax Laws (where total turnover exceeded 50 Lacs).
Yes, you are liable to pay taxes and claim a refund for export of services, in case you don't want to make the payment you can apply for a LUT/ Bond to your nodal officer.
Trust this clarifies your query.
Feel free to call / get back in case of further clarifications.
Thanking You.
Regards,
Rohit R Sharma
BCOM, ACA, LLB-GEN, CERT. FAFP
Hey,
1. Yes, tax has to be paid by you even if you receive the payment from the purchaser after a period of 2 months or may be not receive at all unless you cancel the bill.
Regards,
Keerthiga Padmanabhan
M.Com., CA, LL.B
