GST on Forfeited  Rental Deposit 

By | August 24, 2018
(Last Updated On: August 24, 2018)

GST on Forfeited  Rental Deposit 

Video Explanation by CA Satbir Singh

One of the tenant has made a deposit and communicated before the rent commencement date of his intention not to occupy. The amount is forfeited.

Can we assume that the forfeited amount is not subject to GST as there is no SUPPLY.

Answer : It is tolerating an act or situation which is a deemed service and taxable under GST

 

SCHEDULE II of CGST Act 2017

[See section 7]

ACTIVITIES TO BE TREATED AS SUPPLY OF GOODS OR SUPPLY OF SERVICES

5. Supply of services

The following shall be treated as supply of services, namely:—

……

(e)agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act; and

 

Direct Taxes Ready Reckoner
Service Tax Ready Reckoner
Company Law Ready Reckoner
tax deduction at source
New Books Released on Tax , GST and law

Leave a Reply

Your email address will not be published. Required fields are marked *