I am a work contractor providing construction service of a building. I have received an advance. Whether I need to pay tax on such advance or tax will be paid on issuance of invoice?
Frah Saeed Changed status to publish May 14, 2020
As per Sec 2(119) of the CGST Act, the construction relating to immovable property is regarded as work contract. Further as per Schedule II of the CGST Act, 2017 the work contract relating to immovable property is regarded as supply of service. Further as per Sec 13(2) of the CGST Act, the time of supply in case of services is issuance of invoice or receipt of payment whichever is earlier. Accordingly you will be required to pay tax on such receipt of advances.
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Frah Saeed Changed status to publish May 14, 2020