Money held as security deposit by govt department

Q1. May it be said that it is hold for deficiency in services in future?
Q2. GST could be paid on SD on its actual receipt ?
Replies (3)
Quick Summary
This discussion clarifies the treatment of security deposits held by government departments. It explains that GST is generally not applicable to refundable security deposits, as they are not considered payment for services rendered at the time of receipt. The applicability of GST on security deposits depends on contract terms, and it's typically levied on the entire consideration upfront rather than upon actual receipt of the deposit.

A1 - Depends on the contract/ tender terms and conditions.

A2 - Retention of money is secondary and is only post the sales in done. So GST is already raised on the entire consideration ( including deposit ) so no GST later on at the time of receipt.
No gst payable on SD

Since security deposit is demanded before execution of contract, it would not be possible to conclude in advance that there would be a deficiency of service. So no GST can be paid on advance receipts on this basis.

Further, no gst on refundable deposits.

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