TaxTMI 
TaxTMI 
Assuming but not admitting service tax levy on renting of immovable properties,can department also levy tax on rentdeposit/lease deposit,which is a liability to be returned back to the lessee.This part of the country,they have started roping it in GROSS VALUE definition
Applicability of service tax on rent deposit
19 Dec 2009 
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Service tax on advance receipts: refundable security deposits are untaxed until appropriated to rent, then taxable.
Advance receipts that represent consideration for taxable renting services are subject to service tax; a refundable security deposit taken solely as a guarantee is not taxable on receipt but becomes taxable when appropriated or applied towards rent. Administrative practice may attempt to include rent deposits in gross value at receipt, but CBEC guidance in analogous cases treats initial refundable deposits as non-taxable until adjusted as service consideration. (AI Summary)
Advance receipts that represent consideration for taxable renting services are subject to service tax; a refundable security deposit taken solely as a guarantee is not taxable on receipt but becomes taxable when appropriated or applied towards rent. Administrative practice may attempt to include rent deposits in gross value at receipt, but CBEC guidance in analogous cases treats initial refundable deposits as non-taxable until adjusted as service consideration. (AI Summary)