Is VAT payable on advance received?
A company has collected VAT in advance along with the advance received from the purchaser as on 1/5/12.
The sale is booked as on 31/12/12. Does that make any difference?
Kaushal (Article) (66 Points)
17 January 2013Is VAT payable on advance received?
A company has collected VAT in advance along with the advance received from the purchaser as on 1/5/12.
The sale is booked as on 31/12/12. Does that make any difference?
Rajiv Limbachiya
(Deputy Manager)
(140 Points)
Replied 18 January 2013
shivani
(consultant)
(122 Points)
Replied 18 January 2013
U may collect VAT in advance from the your buyer and retain,this is paid only after effect of sales.
This is collection of funds in advance for near future supplies--
As a gurantee money --
Remmitance to vat dept only in following month after the sales,
Anand
(Chartered Accountant)
(166 Points)
Replied 19 January 2013
VAT & Sales Tax Payable only on effect of sale, so CST or VAT is not payable on advance.
MJ Krishnamurthy
(ACCT(Retd))
(7197 Points)
Replied 03 February 2013
Mr Kaushal,
I would like to differ onthis matter from the aove learned experts. In Karnataka, also in many other states,advances received towards any intending or future sale is to be treated as turnover and taxes are to be paid as per rules. One can not wait till a sale is confirmed or sale deed registered. Please see rule 3(1)(c) of Karnataka VAT Rules 2005. for reference.........MJK
shivani
(consultant)
(122 Points)
Replied 04 February 2013
I do agree with mr MJK, Normally it happens with property developers.
They raise runniing bills and pay taxes accordinly. OR agaisnt advances they pay taxes.
But in Manufacturing industry this is not practise.
CA INDER PAL SINGH
(CA IN PRACTICE)
(21 Points)
Replied 24 June 2015
please tell me Rule of DVAT regarding advance
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