Advance Receipt from Customer

[MUNIRAJ SRINIVASAN]

Under VAT my client has doing Construction business , he has received advances from his client, if delay payment of VAT amount (ADVANCE ) interest and Penalty is applicable

AI Summary

Construction Advances: VAT Payable on Sales, Not Advances, Unless Notified; Delays May Lead to Penalties Under KVAT A client in the construction business received advances from their client and inquired about the implications under VAT regarding delayed payment of VAT on these advances. The response clarified that under the VAT Act, tax is typically payable upon the sale of goods, not on the receipt of advances, unless specified otherwise in a notification. However, if the tax is not deposited within the prescribed time, interest and penalties may be imposed during assessment. It was advised to review the specific provisions under KVAT for accurate guidance.