Advances basically mean
- lending money or
- Part or full payment made for a transaction before the actual date of payment.
- 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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