Service tax on compensation paid for cancellation of an agreement

[tailor jaffrulla khan]

Whether Service tax is applicable on compensation paid on cancellation of agreement to sell?

AI Summary

Debate on Service Tax Applicability for Compensation from Cancelled Property Sale Agreement: Sale vs. Service Perspective A discussion on whether service tax applies to compensation paid for the cancellation of a property sale agreement received two replies. One participant argued that service tax is not applicable as the transaction is related to the sale of property, which is not liable for service tax. Another participant contended that if the agreement pertains to providing a service, then service tax would be payable on any compensation received upon cancellation.