Service Tax Not Leviable on Notional Interest from Security Deposits for Locker Rentals: CESTAT

Service tax not leviable on notional interest from security deposits for locker rentals: CESTAT. This decision provides significant clarity and relief to banks and financial institutions offering locker facilities. The CESTAT (Customs, Excise, and Service Tax Appellate Tribunal) has ruled that the notional interest derived from security deposits collected for locker rentals does not constitute a taxable service. This ensures that banks are not subjected to service tax on amounts that are essentially security and not direct revenue from providing a service.