GST on Forfeited  Rental Deposit 

Video Explanation by CA Satbir Singh

One of the tenant has made a deposit and communicated before the rent commencement date of his intention not to occupy. The amount is forfeited.

Can we assume that the forfeited amount is not subject to GST as there is no SUPPLY.

Answer : It is tolerating an act or situation which is a deemed service and taxable under GST

SCHEDULE II of CGST Act 2017

[See section 7]

ACTIVITIES TO BE TREATED AS SUPPLY OF GOODS OR SUPPLY OF SERVICES

5. Supply of services

The following shall be treated as supply of services, namely:—

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