Service tax on forfieted AMount

[Prakash Gupta]

Dear All,

Please share your view on applicability of the service tax on forfieted amount. the assessee is providing service of residential construction services.

Thanks,

Regards

Pankaj Singh

AI Summary

Debate Over Service Tax on Forfeited Amounts in Construction Contracts; Penalty vs. Consideration Under Finance Act Sections A discussion on the applicability of service tax on forfeited amounts in residential construction services. Various participants debated whether such amounts, retained due to contract cancellation, are taxable. Some argued that forfeited amounts are taxable as they represent consideration for services agreed to be provided, while others contended they are penalties and not subject to tax. The discussion referenced sections of the Finance Act and interpretations of 'service' and 'consideration.' A related query involved whether service tax should be paid on unclaimed advances written off as income, with opinions differing on the legitimacy of departmental demands for additional tax.