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

asked Jan 8, 2018 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

2 Answers

+1 vote
answered Jan 8, 2018 by Visio (4,610 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, 2018 by anonymous
get cleared the doubts. Thanks a lot
commented Jun 21, 2018 by K D M DULMINI (100 points)
How to declare withheld retention amount to revenue?

If we take retention value as revenue at the time of retention is paid, it will come to PL without any cost because the cost related to particular retention has been made one or two years back. So there would be unnecessary profit at the year which the retention is paid back.
0 votes
answered Jan 4 by Deerdeder
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