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Do I need to pay whole GST tax amount before the complete delivery of a service?

+1 vote

Hello, I have given a website designing work to a company.
The total project cost is INR 30,000 and it will be executed in 3 phases(10K for each phase). The first phase is completed, I have paid 10,000 + GST (18%) i.e. 1800 for this phase. Then, the company is asking for the whole GST amount although the project is not completed yet, only first phase is done. They are saying that they would need to pay the whole GST amount to Govt. in the beginning.
Moreover, still the invoice is not raised as the project is not completed.

I don’t have any idea about GST, but as per common sense I think they are bluffing. How could they would need to pay taxes for the amount which is not received at their bank account?

posted Nov 21, 2017 by Sahana

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1 Answer

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The time of supply of services when GST would be attracted is the earliest of the following:
1. Date of invoice
2. Date of payment
3. Date of provision of service
4. Date on which the recipient shows receipt of services in his books of account.
In view of the above, you have done the right thing of paying him the GST only for the phase he has completed. As and when they complete the other phases you can release the payment along with applicable GST for the work completed.

answer Nov 22, 2017 by Shamita