A contractor was awarded a contract for the supply of goods and, as per the conditions of the contract, he deposited the security deposit. Later, the contract was cancelled as he failed to supply the goods and the security deposited was forfeited as per conditions of the contract.
Please confirm whether GST is applicable for forfeiture of security deposit in the above case
Thank you.
No gst on forfeiture of security deposit.
Thank you sir. In this context it is mentioned here that at the time of awarding the subject contract, vendor was asked to deposit the security deposit amount which was calculated taking into account GST, i,e; Basic cost + GST.
In view of the above, Please confirm as to whether GST amount included in forfeited Security Deposit , is required to be refunded to vendor .
Thank you sir.
CAclubindia
