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Service tax on security deposit with mobile service operator

Mayadhar Rout (Student) (37 Points)

10 July 2012

Hi all,

i have a query regarding service tax. My query is, if we pay security deposit against new mobile post paid connection, is service tax charge by service operator? i.e if i pay Rs.300 as secutity for new connection. Is service tax will charge by operator on same Rs.300 except call charges.

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4 Replies

Parihar Gopal (Corporate Taxation ) (392 Points)
Replied 10 July 2012

yes if it non-refundble & adjusted against call charges.

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Ajit kumar Dubey (Taxation Manager) (637 Points)
Replied 10 July 2012

View of Parihar is correct. You can ask with the mobile service operator not to adjust the same and refund it after specified period. You can plan your taxes.

Prateek Agarwal (Sr. Executive - Finance & Accounts) (1732 Points)
Replied 10 July 2012

Agreed with learned members above. If its non-refundable and adjustible against call charges, then service tax shall be applicable.

CA D.C. Bansal (Accounts Head) (283 Points)
Replied 10 July 2012

No, if it is a refundable security deposit, it is not taxable. However, if later on, it is adjusted against call charges then first service tax on call charges has to be levied and after that it has to be adjusted against security deposit.