GST is applicable on the performance guarantee deposits or not?.The deposits will be returned after completion of Works. If work is not satisfactory the deposit amount will be holded. Pleade clarify whether GST is applicale or not.

Reply— According to Section 2 sub-section (31) of CGST Act 2017, Deposit received shall not be considered as payment made for supply of services unless the supplier applies such Deposit as a consideration for the said supply. GST is not applicable on refundable security Deposit.