Is GST applicable
This query is : Resolved
Quick Summary
09 June 2022
whether GST applicable on
Deposit/Security Deposit
or
Advances received
Deposit/Security Deposit
or
Advances received
Udaya Chandran
(Expert)
10 June 2022
GST is applicable on advance received for the supply of services at the time of the receipt of such advance.
GST is not applicable on the advances received for the supply of goods at the time of receipt of such advance.
However, according to proviso to Section 31 of CGST Act, a deposit shall not be considered as payment for the supply of goods or services unless the supplier treats such deposit as consideration for the supply.
Hence, if the supplier takes the deposit as consideration for the supply of services, then GST is applicable on such deposit if supply is made against the deposit.
GST is not applicable on the advances received for the supply of goods at the time of receipt of such advance.
However, according to proviso to Section 31 of CGST Act, a deposit shall not be considered as payment for the supply of goods or services unless the supplier treats such deposit as consideration for the supply.
Hence, if the supplier takes the deposit as consideration for the supply of services, then GST is applicable on such deposit if supply is made against the deposit.
CA Pradeep Sharma
(Expert)
10 June 2022
no need to pay gst on security/deposit/advance unless it is adjusted with payment of supply.
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