Home Forum Service Tax Month 2 2010 2010 (2) This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
Service tax applicability on interest free security deposit - Service TaxExtract A co-op.bank provides safe deposit locker facilities toits members on token rent of Re.1/-per year.But it also takes interest free security deposits (say rs.5000/- or rs.10000/- for a 5/10year period) from members to whom safe deposit lockers are provided.Stax is paid on total rent collected (by way of re.1/-per year) during the year. Query:-1)whether stax suptd. can demand stax on 'interest free security deposit on notional amount of interest which the said deposits would have earned during the year.?(say at the average rate of F.D. rate borrowed by the bank during the period).This is hypothetical working of stax. 2)Since lockers are not provided entirely free can the suptd. take support of valuation rules(w.e.f.18/04/2006)? 2b)How can above locker services be valued? Note:-a)Security deposit is refundable whenever locker is vacated or agreement terminated by the customer. b)Token rent is charged and it is not entirely free. 3) Any case law in respect of above nature or similar nature ?Pl. quote judgements
|