Received an advance payment? Here's what GST law requires you to issue.
When a buyer pays you before you've supplied the goods or completed the service, you must issue a Receipt Voucher — a GST-compliant document that acknowledges the advance and records the tax due on it.
Record advance payments in GrowkitWhat is a Receipt Voucher?
A Receipt Voucher is a document you issue to a buyer when they pay you in advance — before you supply the goods or complete the service. Under GST rules, when you receive an advance payment for a taxable supply, you have a GST liability on that advance at the time of receipt. The Receipt Voucher is the document that records this payment and the tax on it.
It is not an invoice — it's an acknowledgment of money received before supply.
When is a Receipt Voucher required?
You must issue a Receipt Voucher when you receive any advance payment against a future taxable supply. Common situations in B2B manufacturing and services:
- Manufacturer receives 30% advance before starting a custom production job
- Service provider receives a retainer at the start of a contract
- Contractor receives mobilisation advance before beginning construction
- Job card in Growkit — advance payment received mid-job before the final delivery
How GST is calculated on an advance payment
When you receive an advance, GST is calculated on the advance amount using the reverse calculation method — because the advance is assumed to be inclusive of GST.
If GST rate is 18% and advance received is ₹1,18,000:
Taxable value = ₹1,18,000 × 100/118 = ₹1,00,000IGST 18% = ₹18,000Total = ₹1,18,000 (the advance received)Growkit calculates this automatically. You enter the advance amount received — Growkit reverse-calculates the taxable value and GST split.
How the advance nets against the final invoice
When you complete the supply and raise the final GST tax invoice, the advance (and the GST paid on it via the Receipt Voucher) is adjusted against the final invoice. The final invoice shows the full value of supply, then deducts the advance already received, and the buyer pays only the balance. In Growkit, this netting happens automatically — when you link a receipt voucher to a job card and then raise the final invoice, the advance is deducted from the final balance due.
Example — job worth ₹5,00,000 + 18% GST:
Total invoice value = ₹5,90,000Advance received (via Receipt Voucher) = ₹1,18,000Balance due on final invoice = ₹5,90,000 − ₹1,18,000 = ₹4,72,000GST on final invoice = calculated on remaining ₹4,00,000 only (₹72,000)What a Receipt Voucher must contain
- Supplier's name, address, and GSTIN
- Serial number — unique per financial year
- Date of receipt of advance
- Recipient's name, address, and GSTIN
- Description of goods or services (even if supply hasn't happened yet)
- Amount of advance received
- Rate and amount of GST (CGST/SGST or IGST)
- Mode of payment (cash, cheque, UPI, NEFT)
What if the deal falls through after you've collected an advance?
If a buyer cancels and you refund the advance, you issue a Refund Voucher — a document that reverses the Receipt Voucher. The GST already paid on the advance can be claimed back as a credit. Growkit's planned Phase 2 includes Refund Vouchers. For now, consult your CA for the GST return treatment of refunded advances.
Frequently asked questions
Is a Receipt Voucher the same as an invoice?
No. A Receipt Voucher acknowledges payment received before supply. An invoice is issued after or at the time of supply. A Receipt Voucher has GST calculated on it (reverse), but it's not the final billing document — that's the tax invoice raised after supply.
Do I need to file a Receipt Voucher in my GST return?
Yes. Advances received are reported in GSTR-1 in Table 11 (advances received against supply to be made in future). The GST on the advance is paid in the same month's GSTR-3B. Your CA will handle the return filing — Growkit generates the document, your CA uses it for filing.
What if I don't know the exact GST rate at the time of advance?
This is a genuine edge case. GST law says you should know the rate at the time of receipt. If the rate is genuinely unknown, you can issue the receipt voucher at 18% (the catch-all rate) and adjust when the final invoice is raised. Consult your CA for complex cases.
In Growkit, how does a receipt voucher link to a job card?
When you record an advance payment on a job card in Growkit, it automatically generates a receipt voucher tied to that job card. When you later raise the final GST invoice for a consignment, Growkit shows the advance already collected and deducts it from the balance due — automatically.
Record advances correctly. Net them against the final invoice automatically.
Growkit generates receipt vouchers and handles the netting — no manual calculation.
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