16 July 2010
X Ltd exceute works contract , it issued it invoice on 01/01/2010 Contract value 1000 and Vat 100 total bill amt 1100/- , And awarder gave payment on 24/05/2010, when liability to pay arises, whether it is accurel basis or payment basis?
03 August 2010
Under VAT/WCT law, tax is payable based upon the date/month of issuance of invoice in the following month, in contrast to law of service tax where you may wait until actual receipt to discharge tax liability. However, in case there were omission in deposit of VAT by vendor, filing of correct VAT return by vendor, deduction of TDS by client in the samae quarter, then it may be tried to revise the date of invoice for the next tax period with mutual consent of the client. However, uncertified work in progress to that extent may be shown for correct revenue recognition.
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