Interest paid on security deposit

[KARAN VERMA]

Sir, whether GST applicable on interest received on security deposit.

[KASTURI SETHI]

Interest on security deposit is a normal interest i.e. in a routine fashion. GST is not applicable on normal interest. Such interest is exempt from GST vide Notification No.12/2017-CT(R) dated 28.6.17 as amended. Notification is as clear as sunshine.

[DR.MARIAPPAN GOVINDARAJAN]

GST is not applicable to interest.

AI Summary

GST exemption on interest: interest on security deposits is exempt from GST and not taxable under current rules.
Interest paid on a security deposit is treated as ordinary contractual interest and is exempt from GST; such routine interest receipts do not attract GST and should not be treated as a taxable supply subject to output tax under the exemption framework.