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Security Deposit Received From Customer: Is GST Applicable?

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Quick answer: GST is not applicable on a refundable security deposit received from a customer, as long as it is held only as security. GST becomes payable when the supplier adjusts the deposit against the price of a supply, for example against rent or invoices. Section 2(31) of the CGST Act clearly says that a deposit is not consideration unless it is applied as payment for a supply. At Sharda Associates , our Chartered Accountants (CA) handle GST registration, return filing, contract and invoicing advice, notices and refunds for traders, service providers and landlords, and also prepare CA-certified project reports for bank loans and business funding. Correct treatment of security deposits avoids unnecessary tax outflow and later disputes. What Does GST Law Say About Security Deposits? GST is charged on consideration received for a supply. The definition of consideration in Section 2(31) of the CGST Act specifically provides that a deposit given in respect of the supply of goods or s...
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Advance Received From Customers: Is GST Payable?

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Quick answer: GST is payable on advances received for the supply of services, because the time of supply is the earlier of the invoice date or the date of payment. For goods, GST is not payable on advances, as the tax is due only when the invoice is issued. When you take an advance for services, you must issue a receipt voucher and pay GST on it. At Sharda Associates , our Chartered Accountants (CA) handle GST registration, return filing, advance and invoicing compliance, notices and refunds for traders, service providers and companies, and also prepare CA-certified project reports for bank loans and business funding. Correct treatment of advances avoids early tax payment mistakes and later disputes. What Does GST Law Say About Advances? The time of supply decides when GST becomes payable. For services, Section 13 of the CGST Act provides that tax is due on the earlier of the invoice date, if issued within the prescribed period, or the date on which payment is received. This means ...
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What Happens If TDS Is Deducted but Deposited Late?

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Quick answer: If TDS is deducted but deposited late, you must pay interest at 1.5% per month or part of a month under Section 201(1A) from the date of deduction to the date of deposit. A late TDS return can attract a fee, and serious default can lead to penalty or prosecution. The expense is not disallowed if the TDS is deposited by the due date of filing the income tax return. At Sharda Associates , our Chartered Accountants (CA) review TDS compliance, file TDS returns, conduct tax audits, prepare income tax returns and reply to TDS notices for proprietors, firms, LLPs and companies, and also prepare CA-certified project reports for bank loans and business funding. A small delay in TDS deposit can grow into a costly default, so quick correction matters. When Must TDS Be Deposited? For most non-government deductors, TDS deducted in a month must be deposited by the 7th of the following month. For tax deducted in March, the due date is generally 30 April. Government offices deposit on...
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