DEPOSIT ON LEASE - ATTRACT GST OR NOT

[RV PERUMAL]

ONE OF MY CLIENT OCCUPIED (GST HOLDER)AN OFFICE ROOM, HE PAYS 5 LAKHS AS A DEPOSIT FOR THREE YEARS LEASE. THERE IS NO RENT PAID BY THE TENANT AND AFTER THREE YEARS COMPLETION, THE BUILDING OWNER SHALL REPAY THE AMOUNT AFTER IF ANY DEDUCTIONS. NOW MY QUESTION IS WHETHER GST CHARGED BY THE BUILDING OWNER (GST HOLDER) ON THE DEPOSIT AMOUNT OR GST IS EXEMPTED. PLEASE SUPPORT WITH ANY AAR OR OTHER EVIDENCES

AI Summary

Lease Deposit GST Query: No GST on Deposits Unless They Affect Rent; Notional Interest Might Attract GST. A discussion in a forum addresses whether a deposit on a lease attracts GST. A client paid a 5 lakh deposit for a three-year lease with no rent, and the landlord will return the deposit after potential deductions. The query seeks clarity on GST applicability. Responses indicate that GST is not applicable on deposits unless they influence the rental price or are used as rent. References to advance rulings suggest that notional interest on deposits may require GST if it affects pricing. However, if the deposit doesn't form part of the consideration, GST may not apply.