Dinesh (student ) (146 Points)
23 June 2015A Contractee has paid Advance to contractor for building residential complex. But bill is not raised by the contractor. Now my question is how to recognise construction charges in the books of contractee(As per AS 9 or AS7) ? whether it would be recorded as an when the bill is raised by contractor or on proportionate completion basis as per AS 7 ? Also how to recognise it for Income tax Purpose ?
CA Suri Kota
(Assistant Manager @ EY)
(955 Points)
Replied 25 June 2015
Hi,
Revenue recognised on Percentage compeltion method. This is applicable even for Income tax purpose.
You should pay the service tax if appilcable on the advance received if n only if the invoice is raise beyond the said period under Service tax provisions.
Thanks,
Suri Kota
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