TaxTMI 
TaxTMI 
2019 (4) TMI 805
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....o such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the MGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, a reference to such a similar provision under the CGST Act / MGST Act would be mentioned as being under the "GST Act". 02. FACTS AND CONTENTION - AS PER THE APPLICANT The submissions, as reproduced verbatim, could be seen thus- STATEMENT OF THE RELEVANT FACTS HA VING A BEARING ON THE QUESTION(S) ON WHICH THE ADVANCE RULING IS REQUIRED. • This application is being filed by E SQUARE LEISURE PRIVATE LIMITED ('Company'/ 'Applicant' / We') having its registered office at 132A, University Road, Ganeshkhind, Pune - 411 016. • The Company is engaged in various services including renting of immovable property to business entities for commercial purpose. The Applicant is discharging GST on the rent received from the lessees. The Applicant has also taken interest free security deposit (hereinafter to be referred as "security deposit') from the lessees. • The security deposit taken from the lessees on account of security against the damages, if a....
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....netary value of any acts, promised to be made by the receiver of the supply of goods or services, or both, to the provider. The proviso explains as to when 'deposits' will form part of consideration, and hence, forms part of value of the supply and consequentially get taxed. • Further, deposits will not form part of payment for the supply unless the supplier applies such deposit as consideration for the supply. Thus, only when the deposit is applied as consideration it becomes taxable and if it is held as security deposit or refunded, it is not taxable. • It is a common practice in the renting /leasing transactions to collect sums in the form of security deposit from the lessee. Further, it is important to mention that, usually deposit is pre-decided by the parties before or at the time of entering into an agreement. Also, rent/lease is collected over and above, as a consideration towards use of property. Therefore, the amount of rent/lease could very as per agreement and depends on various businesses, market, and commercial factors. • Typically, the prices of commercial immovable property are very significant and therefore Applicant has obtai....
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....ct that the advance received has influenced the fixation of the price of the goods by way of charging a lesser price from or by offering a special discount to the buyer who has made the advance deposit. • Given the above, it can be construed that only where an advance has been received from the buyer of goods and the Excise Officer had evidence to prove that such advance has influenced the price of the goods by way of any discounts/offers, then in that case, the notional interest can be added to the assessable value to arrive at the appropriate Excise duty to be paid. • It is submitted that in the present case, the interest free refundable security deposits has not influenced the rent of the properties given to lessees. • Further, the decision in the case of M/s. Magarpatta Township Dev. & Const. Co. Ltd Vs. Commr. Of C. Ex. Pune III (2014 (33) STR 53 (Tri. Mumbai) = 2013 (7) TMI 669 - CESTAT MUMBAI, wherein; it was held that "The practice of taking security deposit for the premises rented out on lease basis is common throughout the country and the amount of security deposit taken also varies from place to place and also depends on th....
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....f any? In case GST is applicable what would be value of notional interest for value of GST? submission as departmental authority: As per definition of consideration in section 2, sub-section 31 of MGST Act 2017, deposit does not form part of consideration, unless adjusted against consideration. As per terms and conditions of copy of agreement produced by lessor and copy of Order by Stamp Duty authority, lessor has determined the rent at market value. Lessor has also made provision for increase in rent at fixed time schedule. Free refundable deposit does not provide for any additional consideration to the lessor. Therefore, interest/ notional interest on security deposit received by the lessor is not liable to GST. 04. HEARING The Preliminary hearing in the matter was held on 05.12.2018, Ms. Vaishali Kharde, C.A. and Ms. Shruti Gulecha C.A. appeared and made oral and written submissions for admission of application as per detailed contentions made in their ARA submissions. Jurisdictional Officer Ms. Kiran Sonawane was not present at the time of the Preliminary Hearing. The final hearing in the matter was held on 18.12.2018 Sh. Pritam Mahure, C.A., along with ....
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....iture, equipment's, fittings supplied along with the premises or any damage constitute consideration is vis a vis any supply under the provisions of GST Act. Section 2(31) defines the term consideration as following:- (31) "consideration" in relation to the supply of goods or services or both includes- (a) any payment made or to be made, whether in money or otherwise, in respect of, in response to, or for the inducement of, the supply of goods or services or both, whether by the recipient or by any other person but shall not include any subsidy given by the Central Government or a State Government; (b) the monetary value of any act or forbearance, in respect of, in response to, or for the inducement of, the supply of goods or services or both, whether by the recipient or by any other person but shall not include any subsidy given by the Central Government or a State Government: Provided that a deposit given in respect of the supply of goods or services or both shall not be considered as payment made for such supply unless the supplier applies such deposit as consideration for the said supply; The definition of consideration is inclusive and the cons....