Renting of immovable property

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CA Sudha S Keswani (Querist)
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26 February 2013 Dear experts, If a company is earning income from renting of immovable property and in between tenant vacant the property. hence the security deposit that was given by tenant was retained by owner as per cancellation deed. is the security deposited retained as compensation is taxable as service tax? both before ammendment and after amendment?

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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26 February 2013 i) If the security amount is forfeited to adjust towards arrears of rent, then ST is leviable on the forfeited security deposit.

ii) If the security amount is forfeited as compensation for damages caused to the building,then such compensation would not form part of the value of taxable service since the damage caused by the tenant is not relatable to provision of service of renting of the office building and hence ST can't be imposed.

CA Sudha S Keswani

CA Sudha S Keswani (Querist)
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27 February 2013 as per cancellation deed, security deposit is retained as compensation for vacant of premises before time period. in that case whether ST is applicable? both before and after amendment of 2012? and if taxable or not as per which section or rule?

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