Taxability of contractual penalties depends on whether payments are consideration for an agreed toleration or an ancillary supply. Taxability under GST hinges on whether payments such as liquidated damages, penalties, cancellation charges or late fees constitute consideration for a supply of agreeing to refrain, tolerate or do an act. Such declared service requires an express or implied contractual agreement and a nexus between the agreement and the payment. Purely compensatory or punitive payments arising from breach, statutory cancellation or enforcement without an agreement to tolerate or permit the act are not consideration and are not taxable; amounts received as ancillary commercial facilities to the principal supply are taxable as part of that supply unless the principal supply is exempt.