APPLICABILITY OF GST WHEN TDS AND RETENSION MONEY IS DEDUCTED FROM ADVANCE

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..... DEAR EXPERTS, ONE CONTRACTOR IS ENTERED INTO CONSTRUCTION AGREEMENT. AS PER AGREEMENT CUSTOMER WILL GIVE 10,00,000/- (TEN LAKHS) AS AN ADVANCE. BUT HE WILL DEDUCT FOLLOWING ITEMS AS PER AGREEMENT. a. 3% - 30,000/- FOR SECURITY DEPOSIT b.10% - 100,000/- AS A RETENSION MONEY c. 2% - 20,000/- FOR TDS AFTER ABOVE DEDUCTION CUSTOMER CREDITED 8,50,000/- IN CONTRACTORS BANK ACCOUNT. MY QUERY IS .....

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..... WHICH AMOUNT WILL BE CONSIDERED FOR DISCHARGING GST LIABILITY ON ADVANCE RECEIPT ? - Reply By KASTURI SETHI - The Reply = .1. GST is to be paid on TDS. This is undisputed. 2. Retention money is a deferred payment. It is a type of advance to be used if required later on after the completion of work. It is taxable as advance. 3. Security deposit is a sort of advance. The purpose is to meet .....

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..... unforeseen circumstances. It is also taxable as advance. Any advance is subject to final adjustment. Advance itself is not a consideration against supply. Advance becomes consideration only when supply is made. Go through proviso to Section 2 (31) of CGST Act . Provided that a deposit given in respect of the supply of goods or services or both shall not be considered as payment made f .....

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..... or such supply unless the supplier applies such deposit as consideration for the said supply; - APPLICABILITY OF GST WHEN TDS AND RETENSION MONEY IS DEDUCTED FROM ADVANCE - Query Started By: - Mehul Pandya Dated:- 15-10-2020 Goods and Services Tax - GST - Got 1 Reply - GST - Discussion Forum - Knowledge Sharing, reply post by an expert, personal opinion Tax Management India - taxmanagementin .....

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..... dia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax .....

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