TaxTMI 
TaxTMI 
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.
provision accounts and book of entry
18 Jan 2025 
2 Replies 
976 Views Asked by
Construction companies can recognise provisioned revenue under POCM, but GST is due only upon invoicing or receipt.
Construction companies may recognise revenue on a provision or unbilled basis under accrual accounting and the Percentage of Completion Method (Ind AS 115), but GST liability arises only on time of supply when a tax invoice is issued or payment is received; provision entries alone do not create GST liability and will produce reconciling items in GSTR 9/GSTR 9C that must be disclosed and documented. (AI Summary)
Construction companies may recognise revenue on a provision or unbilled basis under accrual accounting and the Percentage of Completion Method (Ind AS 115), but GST liability arises only on time of supply when a tax invoice is issued or payment is received; provision entries alone do not create GST liability and will produce reconciling items in GSTR 9/GSTR 9C that must be disclosed and documented. (AI Summary)