CESTAT ruled that liquidated damages/penalty charges collected ...

Gujarat Industries Power Company Wins Tax Dispute Over Liquidated Damages, Clarifies Non-Taxability of Contract Penalty Charges Under Section 66E(e)

May 8, 2025

Case Laws Service Tax AT

CESTAT ruled that liquidated damages/penalty charges collected by M/s. Gujarat Industries Power Company Limited from vendors/suppliers for contract breach do not constitute a declared service under Section 66E(e) of the Finance Act, 1994. The tribunal consistently held that service tax demand on liquidated charges is unsustainable, specifically affirming that penalties for non-completion of contractual timelines are not taxable. The appeal was consequently allowed, exempting such penalty amounts from service tax liability.

View Source

← Previous Next →

CESTAT ruled that liquidated damages/penalty charges collected ...

Gujarat Industries Power Company Wins Tax Dispute Over Liquidated Damages, Clarifies Non-Taxability of Contract Penalty Charges Under Section 66E(e)

May 8, 2025

Case Laws Service Tax AT

You may also like:

Levy of service tax with interest and penalty - liquidated damages - While the above Orders have been passed by the Tribunal in 2022, subsequently, CBIC has issued...

The court dismissed the appeal against the arbitrator's decision not to levy liquidated damages due to the failure to plead and demonstrate legal injury. The court held...

Disallowance of liquidated damages claimed by assessee - “Liquidated damages” are compensation paid for breach of contract. We are therefore, unable to understand how...

Disallowance of assessee’s claim in respect of its liquidated damages - Revenue argument that these liquidated damages are only in the nature of a provision is...

Payment of liquidated damages - Capital or Revenue in nature - the claim of assessee on liquidated damages deducted under the agreed condition of the contract is...

The Appellate Tribunal held that liquidated damages/penal interest charged at 2% by the appellant cannot be construed as additional consideration but is a penal interest...

SC dismissed appeal concerning liquidated damages claim under plant machinery delivery contract. Court held appellant's claim for Rs.107.54 lakhs was not based on Clause...

INDIRECT TAX DISPUTE RESOLUTION SCHEME, 2016 - Power to make rules - Clause 215 of the Bill

DIRECT TAX DISPUTE RESOLUTION SCHEME, 2016 - Power to remove difficulties - Clause no. 207 of the Bill

The High Court held that the petitioner was eligible to apply under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, for resolving legacy tax disputes. The...

Exemption under Tonnage Tax Scheme - liquidated damages - disallowance of ‘other operating revenue’ claimed by the assessee as exempt income - liquidated damages cannot...

Levy of Service Tax on amount of penalty (liquidated damages) collected from their contractor - to refrain from an act or to tolerate an act or a situation or to do an...

Levy of service tax - liquidated damages/compensation charges received by the Appellant towards the breach and non-compliance of Minimum Guaranteed Tonnage (MGT) as per...

Levy of service tax - liquidated damages recovered by the appellant for acts of default - consideration for tolerance of an act or not - it is not possible to sustain...

Levy of Service Tax - amount of liquidated damages/penalty collected by the appellant for non-compliance of the terms of the procurement contracts - - Explanation to...

Quick Updates: