Advance received from customer longer than 3 years whether deposit or loan
This query is : Resolved
29 December 2022
Pls share your opinion on the following query.
A foreign client made an advance payment of 2crore to an Indian co. In 2019. After that due to covid the services could be provided. During FY the Indian company completed service worth 20 lacs. The foreign client extended the period for completion of service till 31st March 2023.But still the substantial psty of service is likely to be pending. Will the advance lying as on date 31st March 2023 be treated as a loan or deposit in DPT.
What will be position if the foreign client extends the contract for further one year.
Thanks
PC Joshi
A foreign client made an advance payment of 2crore to an Indian co. In 2019. After that due to covid the services could be provided. During FY the Indian company completed service worth 20 lacs. The foreign client extended the period for completion of service till 31st March 2023.But still the substantial psty of service is likely to be pending. Will the advance lying as on date 31st March 2023 be treated as a loan or deposit in DPT.
What will be position if the foreign client extends the contract for further one year.
Thanks
PC Joshi
29 December 2022
Treat it as advance against supply of service.
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