Contractual consideration nexus: GST applies only where payment is consideration for agreeing to do, refrain, or tolerate acts. GST applies to payments only when they are consideration for an agreement to refrain, tolerate or do an act under paragraph 5(e) of Schedule II; absent an express or implied contractual promise and a nexus between supply and payment, liquidated damages, statutory compensation, fines, forfeitures and penalties that merely compensate for breach, deter violations, or flow from statutory orders are not supplies and not taxable, whereas payments that constitute consideration for ancillary or facilitation services (like cancellation fees, late payment acceptance, or pre payment/early termination facilities) are taxable and assessed with the principal supply.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Contractual consideration nexus: GST applies only where payment is consideration for agreeing to do, refrain, or tolerate acts.
GST applies to payments only when they are consideration for an agreement to refrain, tolerate or do an act under paragraph 5(e) of Schedule II; absent an express or implied contractual promise and a nexus between supply and payment, liquidated damages, statutory compensation, fines, forfeitures and penalties that merely compensate for breach, deter violations, or flow from statutory orders are not supplies and not taxable, whereas payments that constitute consideration for ancillary or facilitation services (like cancellation fees, late payment acceptance, or pre payment/early termination facilities) are taxable and assessed with the principal supply.
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