As per a renting agreement entered into in 2006, a token amount is fixed as monthly rent for the next 25 yrs while a security for a huge amount has been taken. No service tax was prososed as the same was not applicable at that time.
The query is what would be the gross value for service tax. Whether the Service Tax determination Rules would be attracted, keeping in view that no other consideration is being received in kind or otherwise.
Clarification sought on service tax calculation for property rented since 2006 under fixed rent agreement with refundable deposit. A query was raised regarding the calculation of service tax for a property rented under a 2006 agreement, which set a fixed monthly rent for 25 years and included a large security deposit. At the time, service tax was not applicable. The question concerns determining the gross value for service tax and whether the Service Tax Valuation Rules apply, given no other consideration is received. The response suggests that if the deposit is refundable, the Valuation Rules may not apply, but the answer could change if the deposit's nature differs. (AI Summary)
TaxTMI 
TaxTMI 
