The Mumbai Bench of Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) in Kagal Nagar Parishad vs. Commissioner of Central Excise held that onetime non-refundable deposit is not liable for service tax under the head of renting of immovable property.
The issue before the Tribunal was whether the onetime non-refundable deposit is liable for Service Tax under the head of renting of immovable property or not. The Counsel for the appellant argued that the issue was no longer res integra as the issue had been already decided that such non-refundable deposit could not be taxed towards the service of renting of immovable property. he placed reliance on some cases inter alia, Greater Noida Indl. Devp. Authority. The Authorized Representative (A.R.) of the Revenue reiterated the findings of the impugned order.
The CESTAT Bench comprising of Judicial Member Ramesh Nair and Technical Member Raju observed “We find that there is a separate charge for the rent, which alone is taxable, the onetime premium charges are non-refundable deposit, it is called as one-time premium and not part of the rent. Therefore, the same is not taxable.”
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