I'm seeking clarity on whether GST is chargeable on deposit paid by customers.
I have searched the community and in one case, the ATO says yes it's chargeable, in another thread, the ATO says no it's not chargeable.
Which one is it?
Below are the 2 contradicting answers:
https://community.ato.gov.au/s/question/a0J9s0000002L0P/p00170859
https://community.ato.gov.au/s/question/a0J9s0000001Dvt/p00029864
I like your thinking - yes, it's possible that when the ATO replied "The deposit does attract GST, yes." on the first thread, they meant that yes it attracts GST when/if the deposit is forfeited.
It would have been clearer to explain that security deposits are not subject to GST unless the deposit is forfeited.
I think it might be the person answering the clothing deposit question didn't mention the timing that might make this confusing - they mentioned deposit has GST but didn't say the "deposit invoice" or when.
I would go with customer deposits no GST at the start, Dr Cash, Cr Customer deposit. When they forfeit deposit (Dr Customer deposit, Cr Sales, Cr GST collected) or the deposit is used to pay towards an invoice, then GST is charged - (Dr Customer deposit, Dr Cash, Cr Sales, Cr GST collected).
I like your thinking - yes, it's possible that when the ATO replied "The deposit does attract GST, yes." on the first thread, they meant that yes it attracts GST when/if the deposit is forfeited.
It would have been clearer to explain that security deposits are not subject to GST unless the deposit is forfeited.
15 Apr 2026 · 4 min read time
22 Apr 2024 · 6 min read time
15 Apr 2026 · 4 min read time
1,180 views
2 replies