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Retention Monies in Transitional context

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Retention Monies in Transitional context

Post by bathu14 on Sun Mar 29, 2015 12:56 am

In cases where monthly progress claims are made, how is Retention Monies (RM) subject to GST calculated when work starts before AD and ends after AD?
Is it on the basis of RM x workdone after AD/total work done from start to end        

How does this method compare with example in RMCD guides notes where the time duration prior to and after AD was used to ascertain RM subject to GST, i.e. the work done after AD was calculated on the basis of the 'proportion of time after AD' as compared to the 'overall project time'


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Re: Retention Monies in Transitional context

Post by joseph on Mon Mar 30, 2015 10:28 am

Retention amount is the amount of progress payment which is not paid until the conditions specified in the contract for the payment of such amounts have been met or until defects have been rectified. I don't believe you can attach it to workdone pre- or post-GST.

The full retention sum should be subject to GST if it is invoiced post-GST.


Any opinion expressed is strictly my personal view based on my understanding and interpretation of the GST Act 2014, Regulations, Orders, DG's Panel Decisions and Customs' Guides. You should seek advice from experts and/or the Customs Dept if the subject matter is significant to your business.


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