Our Recommendations :-
Follow CA Final FB Page

Advance from customers-Private company(Acceptance of deposits)

Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 Aarthi.P asked over 2 years ago

If a Private company has advance received from customers for sale of goods/ services outstanding.,(ie neither sales/ service booked or amount returned to customers) , for a period greater than 365 days., what is the implication with reference to Acceptance of deposits( Sec 73-76) of Companies Act 2013?

    0       0 Answer Now Comment Report
Aarthi.P commented over 1 year ago

Thanks for the reply,I want to know what should be done from compliance point of view and the penal consequence in this case.,eg interest payment ,whether Return of Deposits should be filed in such cases also, etc.

3 Answers
Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 HIMANSHU answered over 2 years ago

1. Any amount received in the course of or the purpose of the business for the following:- a. As advance for the supply of goods or provision of services provided such advance is appropriated against supply of goods or provision of service within 365 days from the receipt of such amount, b. As advance received in connection with consideration for property under an agreement or arrangement, c. As security deposit for the performance of the contract for supply of goods or provision of services. d. As advance received under long term projects for supply of capital goods. If any amount received under clause (a), (b) and (d) becomes refundable due to the reasons that the company accepting money does not have necessary permission or approval to deal with the goods or services then the amount received shall be deemed to be a deposit after the expiry of 15 days from the date they become due for refund.

    0       0 Comment Report
Important Note – Preparing for CA Final?
CAKART provides Indias top faculty each subject video classes and lectures – online & in Pen Drive/ DVD – at very cost effective rates. Get video classes from CAKART.in. Quality is much better than local tuition, so results are much better.
Watch Sample Video Now by clicking on the link(s) below – 
For any questions Request A Call Back  
Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 megha answered over 2 years ago

hello, here is the answer of your query > Section 73 provides certain amounts which would not be considered as Deposits which includes one of the below mentioned point. **Any amount received in the course of or the purpose of the business as advance for the supply of goods or provision of services provided such advance is appropriated against supply of goods or provision of service within 365 days from the receipt of such amount,** *************** thus, as per your question concerned, the answer for your question would be that amount received by Private Company, from customers for sale of goods/ services outstanding.,(i.e. neither sales/ service booked or amount returned to customers) , for a period greater than 365 days., be considered as Deposit.

    0       0 Comment Report
Open uri20170510 32134 ivjxpn?1494421728 Shreedhar Sutar answered over 2 years ago

Hi Aarthi.p Deposit includes **any receipt of money by way of deposit or loan or in any other form**, by a Company. However Section 73 provides certain amounts **which would not be considered as Deposits** which inter alia includes below point. **1. Any amount received in the course of or the purpose of the business for the following:-** a. As **advance for the supply of goods or provision of services** provided such advance is appropriated against supply of goods or provision of service **within 365 days from the receipt of such amount,** b. As advance received in connection with consideration for property under an agreement or arrangement, c. As security deposit for the performance of the contract for supply of goods or provision of services. d. As advance received under long term projects for supply of capital goods. If any amount received under clause (a), (b) and (d) becomes refundable due to the reasons that the company accepting money does not have necessary permission or approval to deal with the goods or services then the amount received shall be deemed to be a deposit after the expiry of 15 days from the date they become due for refund. Thus looking at the above provisions the answer for your question would be that amount **would be considered as Deposit.**

    0       0 Comment Report
Similar Questions
Get Notifications
Videos
Books
Notes
Loading
SIGN UP
Watch best faculty demo video classes

These top faculty video lectures will
help u prepare like nothing else can.