Renting of immovable property.

[MANASH MUKHERJEE]

Dear Sir ,

A party received refundable security deposit in addition to monthly rental . Wheather the amout received as refundable security deposit is chargeable to Service tax or is exempted?

AI Summary

Refundable Security Deposits with Rent Not Subject to Service Tax Unless Used for Services, Clarify Experts. A query was raised about whether a refundable security deposit received along with monthly rent is subject to service tax. Three responses clarified that such a deposit is not considered a service charge and is therefore exempt from service tax, as it is intended only as a security measure. However, if the deposit is used as payment for services, it would then be considered a service charge and subject to tax. The consensus among the respondents was that the deposit does not constitute consideration for the service unless utilized as such.