Financial Services

Bonds and security deposits

Deposits may be received as security and returned to the payer on the completion of an obligation.

Receipt of security deposit

The initial receipt of the deposit as security is not subject to GST.

Repayment of security deposit

The repayment of the deposit is not subject to GST.

Retention of security deposit

Deposits that are not refunded to, or forfeited by, the customer, or applied as all or part of the consideration, are subject to GST. The University is liable for an amount of 1/11th of the deposit retained or not refunded to the customer as GST.

The GST is accountable in the period the deposit is forfeited.

Deposits received as payments in advance

Deposits may be received and treated as a part-payment in advance. The receipt may be either:

  • applied directly to an income account and is therefore subject to GST (provided it was not a GST-free output)
  • applied to offset a debtor and is therefore not subject to GST. The original creation of the debt was subject to GST (provided it was not a GST-free output) and the deposit is treated as merely a part-settlement of the debt.