In a construction project, VAT & NBT should charged after Retention value or before retention value

asked Jan 8 in VAT by anonymous
Ex. value of work done          100
       22% Advance recovery    (22) (Already VAT & NBT Claimed)
Value before retention           78
Retention 10%                         (10)
Net Value                                     68

Here VAT & NBT invoice should raised on Value 78 (Before retention) or 68 (After retention). Pls clarify

1 Answer

0 votes
answered Jan 8 by Sahan321 (3,060 points)
in case of a progress payment, a retention is made, the retention should be taxed only at the time the retention will be paid (in future). At the time of supply, only the “net progress payment” should be charged to VAT. Retention should be charged at the rate prevailing at the time of payment.
commented Jan 8 by anonymous
get cleared the doubts. Thanks a lot
Search Forum

Welcome to Lanka Tax Forum, where you can ask questions and receive answers from other members of the community. Although no registration is required to ask questions or provide answers, we kindly request you to take few seconds to get registered as a member.