Supply of goods by creditor

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

31 July 2015 whether transfer of goods by a creditor for more than a year will be considered as a deposit in light of companies act 2013.
the creditor has not received any payment since 1 year

Querist : Anonymous

Querist : Anonymous (Querist)

31 July 2015 In my view definition of deposit includes any receipt of money by way of deposit or loan or IN ANY OTHER FORM by a company

hence it should be considered as a deposit.

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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26 July 2025 Great question regarding whether the **transfer of goods by a creditor without payment for over a year** constitutes a **deposit under the Companies Act, 2013**.

Let me explain the concepts clearly:

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## 1. **What is a “Deposit” under the Companies Act, 2013?**

### Section 2(31) of the Companies Act, 2013 defines **“deposit”** as:

> *Any receipt of money by way of deposit or loan or in any other form by a company, but does not include such categories as amount received from other companies, amounts received from employees under employee schemes, amounts received in the normal course of business (like trade advances).*

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## 2. **Is transfer of goods by a creditor without payment a “deposit”?**

* **If a creditor has supplied goods but has NOT received payment for more than a year**, it usually means the amount is **outstanding as a trade payable or credit**.
* **Trade credit or unpaid dues for goods supplied are considered “trade payables”**, NOT deposits.
* Deposit implies **receipt of money or money’s worth, given voluntarily to the company with a promise of return or repayment**.
* Merely supplying goods on credit does **not amount to a “deposit”**, but rather a **trade debt** or **credit facility** extended by the creditor.

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## 3. **Key considerations:**

| Aspect | Whether Considered Deposit? |
| ------------------------------- | ---------------------------------------------------- |
| Receipt of money or loan | Yes, if it is money or equivalent |
| Receipt of goods on credit | No, considered trade payable |
| No payment for more than a year | Still trade payable unless contract states otherwise |
| Creditor transfer of goods | Not a deposit, unless treated as loan or advance |

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## 4. **Conclusion:**

* **Transfer of goods on credit (no payment) is a trade payable, NOT a deposit.**
* Even if payment is delayed for over a year, it remains a trade payable.
* However, if the arrangement is structured as a loan or advance (with interest or repayment terms), it could be a deposit.
* It is essential to check the **contractual terms** and the **nature of transaction**.

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### Additional Note:

* Under **Accounting Standards**, trade payables and deposits are classified separately.
* For compliance and disclosure, unpaid dues to creditors are reported as **trade payables**.

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If you want, I can help draft a formal opinion or provide references to relevant provisions from the Companies Act and accounting standards.

Would you like me to do that?

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