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Maintain books of accounts

vipin semwal (B.Com) (33 Points)

01 August 2016

Dear Sir As per the CENVAT Rules: When we take CENVAT claimed the invoice becomes RECEIVED As per the Income tax Act: we are liable to deduct TDS payment and accrual whichever earlier

Please advise me we are which rules follow the time of maintained books of accounts

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Ashok Kumar (CA qualified) (389 Points)
Replied 02 August 2016

Sir,

Both the rules are applicable. We have to harmonise them. It depends on the order of 3 events - Payment, Completion of Service & Receipt of Invoice. If payment is made upfront for the entire invoice amount, deduct TDS at the time of payment, debiting the party. When the service is completed, Credit the party again to the extent of Base amount and what is left in his account will be CENVAT portion which can be claimed on receipt of invoice. You can imagine various scenarios like this based on the sequence of these 3 events. If not clear, give me a particular situation so that I can explain when to do what and how to account them

Regards,

Ashok