Recovery of gst
This query is : Resolved
10 May 2025
My co is in infrastructure projects. We construct one of the biggest bridge in India. On which marathon was arranged. So traffic was blocked. Hence we demanded revenue loss 75 lacks from this company which is toll.. They deposited 25lakhs as security. also some amt rs. 37lacks. after application of gst and tds deducted. We estimated revenue that toll 31 lacs.. Now while releasing sd we recover 6lacks , whether gst also recoverable
12 August 2025
Key points to consider:
Nature of Security Deposit (SD):
Usually, SD is a refundable deposit, not a consideration for supply, so GST is not applicable on receipt or refund of SD itself.
When SD becomes taxable:
If the SD is adjusted against supply/services rendered (like toll charges or revenue loss), then the adjusted amount becomes consideration for supply, and GST applies on that amount.
GST on Adjusted Amount:
Since ₹6 lakhs is being adjusted/recovered against revenue loss or supply, it will attract GST as per applicable rate on your supply (infrastructure service, toll, etc.).
You need to raise a tax invoice for ₹6 lakhs + applicable GST on this recovery.
TDS deduction:
The party deducting TDS should deduct on the value inclusive of GST as per the Income Tax rules.
You should ensure proper accounting of GST on this amount.
Nature of Security Deposit (SD):
Usually, SD is a refundable deposit, not a consideration for supply, so GST is not applicable on receipt or refund of SD itself.
When SD becomes taxable:
If the SD is adjusted against supply/services rendered (like toll charges or revenue loss), then the adjusted amount becomes consideration for supply, and GST applies on that amount.
GST on Adjusted Amount:
Since ₹6 lakhs is being adjusted/recovered against revenue loss or supply, it will attract GST as per applicable rate on your supply (infrastructure service, toll, etc.).
You need to raise a tax invoice for ₹6 lakhs + applicable GST on this recovery.
TDS deduction:
The party deducting TDS should deduct on the value inclusive of GST as per the Income Tax rules.
You should ensure proper accounting of GST on this amount.
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