GST on Retention charge

Why is GST applicable here when there is no supply at all.

ITS SORT OF PENALTY (THE BREACH OF CONTRACT) HENCE AS PER CLAUSE (D) OF SUB-SECTION (2) OF SECTION 15 OF CGST ACT GST IS APPLICABLE.

SIr, what you said is regarding penalty or interest whatever collected for delayed receipt of consideration. But here in this is case I dont think the above refered clause applies.

Hotel charged @ 12% on availment of accommodation and 18% charged on retention charges as room tariff in both the cases is @ 7000

Dear Bhargav

In term of schedule II (5)(e) it's supply of services.

If we refer Section 7 of CGST Act , supply incudes .............. agreed for CONSIDERATION. & If we read the definition of Consideration Section 2(31)(b) the monetary value of any avt or FORBEARANCE in respect of , .........here FORBEARANCE means contractual penalty for not supplying services or goods .

So reading above section in conjoint , the GST attracts. 

Note : Yes in case if it is refunded then GST not applicable or Reversed (On advance for supply of services GST Applicable)

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