GST on Repairs Recovered

[Ethirajan Parthasarathy]

While the tenant vacates, the Landlord with holds certain sum, towards damages caused by the tenant.

Is Landlord (who is GST registered) liable to pay GST on such sum recovered from the tenant.

[KASTURI SETHI]

If you retain the amount, then the transaction is covered under Schedule-II Serial No.5 (e) of CGST Act.

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

[Himansu Sekhar]

Yes, kasturi sir is correct

[Himansu Sekhar]

But subject to the small scale ecemption

[Ganeshan Kalyani]

I too agree with the views of the experts.

[Himansu Sekhar]

Thank you sir

[Hariharan Sundaram]

Respected experts is there any concept of small scale exemption under GST ? The exemption is available only for registration. Once the person is registered he has to pay Gst kindly enlighten me

[Himansu Sekhar]

I assume that the land lord is not registered. The queriest has not mentioned anything about the registration. There is no doubt, once registered, no exemption based on value will be applicable. I

AI Summary

Taxability of withheld security for damages under GST treated as supply of agreeing to tolerate or refrain, taxable if registered.
Retained amounts recovered by a landlord from a tenant for damages are treated as consideration for an obligation to refrain from or tolerate an act and constitute a supply under GST; the transaction is taxable if the landlord is registered, whereas unregistered persons may not be required to collect or remit GST until registration thresholds are crossed.