TaxTMI 
TaxTMI 
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
DEPOSIT ON LEASE - ATTRACT GST OR NOT
03 Sep 2021 
7 Replies 
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Security deposit on lease not taxable under GST if refundable and not influencing rent; notional interest taxable if it affects consideration.
A refundable security deposit that is returned and does not influence rent does not form part of taxable consideration for GST; however, if the deposit affects the price charged or is used as or converted into rent, the deposit (including any deemed or notional interest) may be treated as taxable consideration, and advance rulings vary on the facts of influence and treatment. (AI Summary)
A refundable security deposit that is returned and does not influence rent does not form part of taxable consideration for GST; however, if the deposit affects the price charged or is used as or converted into rent, the deposit (including any deemed or notional interest) may be treated as taxable consideration, and advance rulings vary on the facts of influence and treatment. (AI Summary)