Can someone please advise how to book Sales with inclusive AMC revenue? For example, being a seller cum service provider, if we raise an invoice on a customer for the goods sold + Annual Maintenance Cost (AMC) and book the whole invoice now and pay corresponding sales-tax also, should we also book the whole AMC revenue now or it should be deferred??? (To be recognised over the life of the AMC Contract) Please suggest urgently.
6 Replies
Anand
(Chartred Accountant)
(435 Points)
Replied 11 June 2010
The revenue from AMC contract should be recognised over the life of the contract.
Sandeep Yadav
(CA Final )
(67 Points)
Replied 08 September 2010
Sale and AMC both are different. you have to pay VAT on sale and service tax on AMC. You have to deferred the AMC revenue.
Sheetal Metha
(Article Assistant)
(208 Points)
Replied 08 September 2010
Both the Invoices have to raise seperately.
Revenue should be recognised at the time of execution of Anuual Maintenance Contract.
Because when the party deduct the TDS against your AMC bill, that TDS amount is considered while computing the Tax Liability of the that year.
Sandeep Yadav
(CA Final )
(67 Points)
Replied 08 September 2010
No need to generate separate invoice....u have to separate the sale and amc amount and applicable taxes as well. And for claiming the TDS u have to deferred the revenue amount
Manoj BG
(Tax Professional and in Service)
(1795 Points)
Replied 09 September 2010
HI DEAR,
FOR SALE NO ISSUES. HOWEVER FOR AMC SERVICE, REVENUE SHOULD BE SPREAD OVER LIFE OF THE CONTRACT. THUS, IF THE LIFE OF THE CONTRACT EXCEEDED BEYOND CURRENT FINANCIAL YEAR, THEN REVENUE PERTAINS FOR PERIOD AFTER CURRENT FINANCIAL YEAR SHOULD BE IDENTIFIED AND JV SHOULD BE PASSED AS FOLLOWS :
AMC REVENUE (INCOME) A/C ---------------------------------------------DR.
TO DEFFERED REVENUE (LIABILITY) A/C
REGARDS,
MANOJ
dhiru
(Executive )
(38 Points)
Replied 19 October 2016
In AMC invoicing, customer is demanding 100% Tax Invoice, while we are ready to give Pro-forma Invoice, So, what will be the accounting treatment if we raise 100% Tax invoice, shoule our Sales to be booked 100% than to pass the JV to move in deffered revenue laibility.
Regards,
Dhiraj Pathak
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