declared service

[Dalia Felix]

dear all

Have you started paying service tax on the liquidated damage collected from service providers or suppliers? Do you really think that service tax is required to be paid by the service receiver company? Is there any difference in approach in both these cases (service provider, supplier)

[YAGAY andSUN]

Please check Section 66 E of the Finance Act as amended from time to time in this regard.

[Dalia Felix]

Thanks a lot sir. But, yes or no?

[YAGAY andSUN]

Yes, my clients are paying service tax on LD.  Even, Service Tax Department has also started to issue SCN in this regard to the Assessees.

 

YAGAY & SUN

(Indirect Tax Consultants)

AI Summary

Service tax on liquidated damages: liquidated damages treated as taxable consideration, prompting tax payments and show cause notices. Advisers identify liquidated damages collected from service providers or suppliers as taxable, treating such receipts as consideration for a service under the cited statutory provision; practitioners report that assessees are paying service tax on liquidated damages and that tax authorities have commenced issuing show cause notices to non compliant taxpayers.