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Invoice for advance payment

ramprasad (MBA) (77 Points)

13 April 2014

Normally we raise a pro forma invoice for receiving advance payment, but one of the company is asking us to raise a Normal Invoice for advance payment. should appropriate vat & excise are levied in this invoice for receiving advance payment for which the sales would happen in future date ?

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2 Replies

Vivek Khakhkhar (Assistant Audit Manager) (201 Points)
Replied 14 April 2014

excise applicable when goods removed from factory. here in advance receipt from customers no goods move from your factory so excise does not apply in my view.

Rupesh (NA) (51 Points)
Replied 19 April 2014

I think invoices are raised at the time of sale. An advance payment is just a payment in advance. So,

If the goods sale is being effected now, and only the delivery is pending for a future date, then you should have no problem in issuing the normal invoice.
If the goods sale is not happening now, then how could one issue a invoice with prices, VAT and excise which may change in the future? If there is an agreement/contract/deal which fixes sales prices at a future date then that should be written as terms and conditions of agreement etc.