No service tax payable on interest free security deposits taken from customer towards trading of shares

Last updated: 29 November 2022
Quick Summary
The CESTAT in Ahmedabad has ruled that service tax is not payable on interest-free security deposits taken from customers for share trading. These deposits are refunded without being used. The tribunal previously held that such deposits do not represent the value of any taxable service and are held solely as security.

Court :
CESTAT bench of Ahmedabad

Brief :
The CESTAT bench of Ahmedabad ("the Tribunal") in the case of Marwadi Shares & Finance Ltd. v. C.C.E &S.T.-Rajkot (Service Tax Appeal No. 12087 of 2017) held that the Service Tax is not liable to be paid on the amount collected from the customer as interest free security deposit against trading of shares which is subsequently refunded without utilization.

Citation :
Service Tax Appeal No. 12087 of 2017

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1 Year PLAN
1999
(Excl. of GST ₹359)

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2 Years PLAN
3499
(Excl. of GST ₹629)

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Bimal Jain
Published in Service Tax
Views : 1134
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