Unbuild revenue in a construction contract

[Mukund Honkan]

In respect of certain Construction Company, billing is done on completion of milestones as per client’s requirement  even if work is completed.

Company  has decided  at  the year end such completed work be booked as Un build revenue .

Pl. let us know taxability implications uner Income tax , VAT & Service tax.

It will be nice if I get relevant  case laws   regards Mukund M Honkan

 

AI Summary

Clarification sought on tax implications for unbilled revenue in construction under Income Tax, VAT, Service Tax; review ICAI guidance. A construction company bills clients upon milestone completion, regardless of whether the work is finished. At year-end, completed work is recorded as unbilled revenue. The query seeks clarification on the tax implications under Income Tax, VAT, and Service Tax, and requests relevant case laws. A respondent advises reviewing the revised guidance note by the Institute of Chartered Accountants of India (ICAI) on real estate transactions before altering the company's policy.