Advances basically mean

  1. lending money or
  2. Part or full payment made for a transaction before the actual date of payment.
  3. Security of a transaction in a liquid form.

As specified in the law tax shall be calculated at earliest of any of the following dates:

  • The Tax is due on the date of Supply of Goods or Services or
  • on the date of issue of the Tax Invoice or
  • upon partial or full receipt of the Consideration (within the amount received), whichever comes first.

Since part payment received in advance is covered above, it is certain that VAT is applicable on part advance payment for the supply of goods or services.

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The entire contents of this article is solely for information purpose and have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation.. It doesn't constitute professional advice or a formal recommendation. The author has undertook utmost care to disseminate the true and correct view and doesn't accept liability for any errors or omissions. You are kindly requested to verify & confirm the updates from the genuine sources before acting on any of the information's provided herein above.

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