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

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..... APPLICABILITY OF GST WHEN TDS AND RETENSION MONEY IS DEDUCTED FROM ADVANCE
Query (Issue) Started By: - Mehul Pandya Dated:- 15-10-2020 Last Reply Date:- 17-10-2020 Goods and Services Tax - GST
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GST
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 ITEM .....

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..... S 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 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. Retenti .....

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..... on 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 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 .....

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..... 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 for such supply unless the supplier applies such deposit as consideration for the said supply;
Discussion Forum - Knowledge Sharing .....

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