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Gst on rental deposit later credited to pl account

Vaishnavi Ganesh (Chartered Accountant) (861 Points)

12 August 2017

I would like to know wheter GST is leviable on the the Rental deposit received from the tenant which was credited to Profit and loss account as it was not refunded at the time of vacating the tenancy by the tenant.

Please clarify with relevant provisions under GST.

And also requires tax treatment under IT Act, 1961.

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17 Replies

RAJA P M ("Do the Right Thing...!!!") (127140 Points)
Replied 12 August 2017

The rental based advance amount is not applicable GST and also it's not credited to PandL account. It's shown in Balance Sheet under Loans and Advances head.

(It's not refunded at the time of vacating) You ll be transfer the advance amount to Rent received account at the time of vacating...

1 Like

NAGESWARAN (ACCOUNTANT) (834 Points)
Replied 12 August 2017

@ Raja PM
I highly appreciate ur very accurate and simple reply format .. i need your help. Due to unaware of RCM procedure i kept the RCM payment pending for freight paid to local carrier transport name X 6000.00Rs. can u explain in simple format like flow charr to be entered in Tally. r send the same to my mail jtcgroup64 @ gmail.com

1 Like

RAJA P M ("Do the Right Thing...!!!") (127140 Points)
Replied 12 August 2017

Sir.,
I think If local freight then RCM is not applicable.....

(I ll reply to you tomorrow evening. Morning not available in office bcoz going to playing cricket. So, only)

Vaishnavi Ganesh (Chartered Accountant) (861 Points)
Replied 13 August 2017

What am asking is when that causing deposit was not refunded it will be credited to profit and loss account. In that case, being a credit item in profit and loss account what is the applicability of GST on that item.

NAGESWARAN (ACCOUNTANT) (834 Points)
Replied 13 August 2017

@ Raja PM
sorry sir it is not local freight.Ithink GTA. Every month we are paid morethan 35k to 2 to 3 transport carriers For goods carrying from mumbai , surat, ahmedabad and taken delicery by us at chennai.Like srinivasa rodalines, shreeji transport, mumbai transport etc
we are dealing in textile wholesale sale business at chennai.

RAJA P M ("Do the Right Thing...!!!") (127140 Points)
Replied 13 August 2017

Dear Vaishnavi.,

The advance was not refunded it ll be credited to PandL account.....

How it's credited to PandL account?

Where is the advance firstly accounted and When/Which conditions it's move to Pandl a/c...? and

Why it's move to Pandl account...?

The law point want not only reason. That reason is also inbuilt reasonable...!!!

RAJA P M ("Do the Right Thing...!!!") (127140 Points)
Replied 13 August 2017

Dear Vaishnavi @ CA student.,

I'll come to your point without question and accounting procedure...

The advance is credited to PandL account then it's treat as expenditure it's called as rent or any.

If it's treated as rent also you are registered under GST then you ll be give receipt to the tenant/any....

Another way you are the tenant and you paid the advance and you can't received the advance also you treat as Rent Paid/any. Then the lanlord / any (You book the expense) is registered under GST they ll be give taxable receipt. If they are URD then you ll be tax under RCM for the Rent/any.......

1 Like

RAJA P M ("Do the Right Thing...!!!") (127140 Points)
Replied 13 August 2017

@ NAGESWARAN SIR.,

I say thank you for the Certify.....

I reply to you as per my knowledge and also I'm not a fully knowledgeable person just reply for my knowledge....

Please follow the steps in Your TALLY Software...

1. Create Ledger : Transporting Charges - GTA.

* Under - Direct/Indirect expenses

* Is GST Applicable - Applicable

* Set Alter GST Details - Yes

* Nature of Transaction - Not applicable / anyone its related.

* Taxability - Taxable

*Is reverse Charge Applicable - yes

* Tax rate - Integrated @ 5% & Cess - 0.00. After finished it go to main vindow

* Type of Supply - Services....... Next Enter --> Enter...

Next You can create voucher as

Dr. Transportation - XXXXX

Cr. Shreeji Transports - XXXXX . It's enough for the entry. The tax value automatically shown in "Statutory reports"

NAGESWARAN (ACCOUNTANT) (834 Points)
Replied 13 August 2017

ok thank u sir

RAJA P M ("Do the Right Thing...!!!") (127140 Points)
Replied 13 August 2017

If you have any doubt pls reply...

Also I'm wrong pls reply the same way....

NAGESWARAN (ACCOUNTANT) (834 Points)
Replied 13 August 2017

Sir, i just see the youtube for RCM expns entry in tally. which 8s contradict with ur reply there is a long steps.RCM tax amt paid separately or adjusted in the tax liability r paid with other tax in the same month.