Vat on advance received

U may collect VAT in advance from the your buyer and retain,this is paid only after effect of sales.

This is collection of funds in advance for near  future supplies--

As a gurantee money --

Remmitance  to vat dept only in following month after the sales,

VAT & Sales Tax Payable only on effect of sale, so CST or VAT is not payable on advance.

    Mr Kaushal,

   I would like to differ onthis matter from the aove learned experts. In Karnataka, also in many other states,advances received towards any intending or future sale is to be treated as turnover and taxes are to be paid as per rules. One can not wait till a sale is confirmed or sale deed registered. Please see rule 3(1)(c) of Karnataka VAT Rules 2005. for reference.........MJK

I do agree with mr MJK, Normally it happens with property developers.

They raise runniing bills and pay taxes accordinly.  OR agaisnt advances they pay taxes.

But in  Manufacturing industry this  is not practise.

please tell me Rule of DVAT regarding advance