TaxTMI 
TaxTMI 
gst treatment savings deposit
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....st treatment savings deposit<br> Query (Issue) Started By: - Madhavan iyengar Dated:- 19-7-2020 Last Reply Date:- 21-7-2020 Goods and Services Tax - GST<br>Got 12 Replies<br>GST<br>A NBFC receives deposits like savings bank from customers and pays interest on the said deposit placed minimum deposit is ₹ 500 /- however the customer is required to maintain the balance of ₹ 500 /- if the ....
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....balance falls short of ₹ 500/- then the NBFC will write back the amount below ₹ 500/- after 2 years and it will be treated as income and then transferred to reserve account query whether this income ie deposit not paid back to customer which will be written back by NBFC will it be liable for gst Reply By KASTURI SETHI: The Reply: If the amount is forfeited, it is a supply of service....
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.... and taxable. It is a sort of penalty. It is covered under serial no.5 (e) of Schedule-II. Reply By Madhavan iyengar: The Reply: Kasturi Sir thanks but a few points for my understanding In this case if the principal supply ie deposit is exempt from gst then how the same is taxed when it is written back. Is there any service element in the write back. Reply By rajkumar shukla: The Reply: Re....
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....spected kasturiji. Can you pl be specific and point out the exact service of 5(e) of schedule!!.ie whether it is agreeing to the obligation to refrain from an act,or to tolerate an act or situation or to do an Act. Reply By KASTURI SETHI: The Reply: Dear Madhavan Iyengar Ji, "deposit not paid back to customer which will be written back by NBFC" Pl. elaborate the phrase, "wri....
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....tten back". Whether the phrase "written back' shas been used for "reserve account " maintained by NBFC ? If any person does not maintain sufficient balance, some amount is deducted as penalty from his account. Are you talking of the amount deducted as penalty or the remaining balance amount after deduction of penalty ? Pl. clarify. "deposit not paid back to customer....
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.... which will be written back by NBFC" Reply By Madhavan iyengar: The Reply: Kasturi sir The NBFC has some internal regulations by which if any customer balance is not maintained below a particular amount then NBFC will write back the amount as income Accounting entry passed when deposit is placed Debit Bank A/c Credit Deposit account Now if deposit is not required to be paid back to cust....
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....omer as a result of non maintenance of minimum balance then NBFC will pass following entry - Debit Deposit Account Credit Income account this is called as write back Reply By DR.MARIAPPAN GOVINDARAJAN: The Reply: In my view no. At the same time the views of Shri Sethi could not be ignored. However the GST council has to issue clarification in this regard. Reply By Ganeshan Kalyani: The Reply:....
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.... Tolerating an act of the customer of not keeping minimum balance as per agreed terms. It is a supply. Reply By KASTURI SETHI: The Reply: Sh.Shukla Sir, You have more knowledge than I have. I am dead sure you have grasped what I wanted to say. So I did not find it necessary to mention specifically. I have a great respect for your knowledge, experience and art of drafting. Thanks and regards. ....
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....Reply By rajkumar shukla: The Reply: @kasturi ji..in fact I wanted to discuss this issue in detail ,that is why I asked u to be specific.In fact I feel that tolerating an act should be like NBFC could hv prosecuted the customer in absence of minimum balance or could hv taken any other action but since the company got the money ,it did not prefer to do so.so tolerating an act should hv two limbs......
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....one that normally should / could hv been done but not done for payment of fine or penalty.Here company does not have any other option but to deduct penalty...Will this too fit into that definition? It should be like this situation..If accidently I damage your vehicle,u can lodge a FIR but if I pay you some thing in lieu of that ,you dont..you just tolerate my this act. Just my personal view..not....
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.... necessarily correct.Would like to hv other views. Reply By rajkumar shukla: The Reply: @kasturi ji..in fact I wanted to discuss this issue in detail ,that is why I asked u to be specific.In fact I feel that tolerating an act should be like NBFC could hv prosecuted the customer in absence of minimum balance or could hv taken any other action but since the company got the money ,it did not prefer....
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.... to do so.so tolerating an act should hv two limbs..one that normally should / could hv been done but not done for payment of fine or penalty.Here company does not have any other option but to deduct penalty...Will this too fit into that definition? It should be like this situation..If accidently I damage your vehicle,u can lodge a FIR but if I pay you some thing in lieu of that ,you don't..yo....
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....u just tolerate my this act. Just my personal view..not necessarily correct.Would like to hv other views. Reply By Alkesh Jani: The Reply: Respected Experts, Can we apply Circular No.102/2019 dated 28 June 2019 in the instant case? Thanks for your views Reply By Mahir S: The Reply: Most of the Banks do charge Penalty for non Maintenance of Minimum bank account balance. The bank charges for....
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.... such penalty are fixed plus GST to be paid on such penalty amount. Banks may also charge penalty inclusive of GST amount. Therefore, in the present case too, instead of charging the same is deducted but the process remains the same as much as that penalty has been charged for not maintaining minimum balance. So in my view, it is liable for GST payment.<br> Discussion Forum - Knowledge Sharing ....