https://www.taxtmi.com/article/detailed?id=16905 Refundable security deposits collected as a financial safeguard do not constitute taxable consideration merely because they are received and retained. Taxability arises only when the deposit is actually applied, adjusted or forfeited in relation to a taxable supply. A refundable deposit differs from an advance because it may never be appropriated, and mere custody does not create tax liability without a real nexus to the service. Under GST, the proviso to Section 2(31) similarly provides that a deposit is not treated as payment unless applied as consideration. en-us Mon, 13 Jul 2026 09:20:06 +0530 Mon, 13 Jul 2026 09:20:06 +0530 TaxTMI RSS Generator https://www.taxtmi.com/article/detailed?id=16905 Refundable security deposits collected as a financial safeguard do not constitute taxable consideration merely because they are received and retained. Taxability arises only when the deposit is actually applied, adjusted or forfeited in relation to a taxable supply. A refundable deposit differs from an advance because it may never be appropriated, and mere custody does not create tax liability without a real nexus to the service. Under GST, the proviso to Section 2(31) similarly provides that a deposit is not treated as payment unless applied as consideration. Articles Service Tax Mon, 13 Jul 2026 09:20:06 +0530 https://www.taxtmi.com/article/detailed?id=16905