FCS Deepak Pratap Singh
Quick Summary
Goods and Services Tax Act, 2017 (GST) has brought the concept of One Nation, One Tax, and has simplified the method of collecting and calculating Indirect taxes all over India. There is no cascading effectand ambiguities while dealing with provisions of the GST Act, 2017. We know that for Sale G
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FAQ :
GST is applicable to security deposits only when they are adjusted as consideration for a supply, typically upon the occurrence of a specified contingent event. If the event doesn't occur and the deposit is refunded, it's not considered consideration and no GST is levied.
For mobilization advances received by a contractor, the GST liability arises at the time of receipt of the advance or when the invoice for the advance is raised, whichever is earlier.
Contractors are required to deposit GST on the entire invoice amount for retention money, even if the recipient has only paid a portion. The recipient can only claim Input Tax Credit (ITC) on the portion of the consideration that has actually been paid.
A deposit is generally refundable and only becomes consideration (and thus subject to GST) if a contingent event occurs. An advance is a payment made at the start of a contract, is not refundable, and is always considered consideration, attracting GST liability.
For material advances paid towards the supply of goods, the GST liability is governed by the date of the transfer of title of the goods. GST is payable by the contractor at the time of this transfer.
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