Accounting Treatment for AMC Contracts

The revenue from AMC contract should be recognised over the life of the contract.

Sale and AMC both are different. you have to pay VAT on sale and service tax on AMC. You have to deferred the AMC revenue.

Both the Invoices have to raise seperately.

Revenue should be recognised at the time of execution of Anuual Maintenance Contract.

Because when the party deduct the TDS against your AMC bill, that TDS amount is considered while computing the Tax Liability of the that year.

No need to generate separate invoice....u have to separate the sale and amc amount and applicable taxes as well. And for claiming the TDS u have to deferred the revenue amount 

HI DEAR,

FOR SALE NO ISSUES. HOWEVER FOR AMC SERVICE, REVENUE SHOULD BE SPREAD OVER LIFE OF THE CONTRACT. THUS, IF THE LIFE OF THE CONTRACT EXCEEDED BEYOND CURRENT FINANCIAL YEAR, THEN REVENUE PERTAINS FOR PERIOD AFTER CURRENT FINANCIAL YEAR SHOULD BE IDENTIFIED AND JV SHOULD BE PASSED AS FOLLOWS :

AMC REVENUE (INCOME) A/C ---------------------------------------------DR.

                                 TO DEFFERED REVENUE (LIABILITY) A/C

REGARDS,

MANOJ

In AMC invoicing, customer is demanding 100% Tax Invoice, while we are ready to give Pro-forma Invoice, So, what will be the accounting treatment if we raise 100% Tax invoice, shoule our Sales to be booked 100% than to pass the JV to move in deffered revenue laibility.

Regards,

Dhiraj Pathak