provision accounts and book of entry

[Sudhir Kumar]

Can a construction company books revenue on the basis of provisions. If yes what is its impact on billing procedure and GST liability. Whether GSTR-9C and GSTR-9 will be un-reconciled due to provision entry. The basis of a construction company to make accounting on the basis of provisioning entry.

AI Summary

Revenue Recognition via Percentage of Completion Method: Accounting Flexibility Meets GST Compliance Nuances A construction company can book revenue on provisions using Percentage of Completion Method under accounting standards. While allowed in financial books, this does not automatically trigger GST liability. Provision entries may create differences in GSTR-9 and GSTR-9C reconciliations. Companies must clearly document provision-based revenue and explain discrepancies, ensuring proper accounting treatment without incurring unintended tax risks.