Late-payment charges received as interest for delayed payment for industrial-gas supplies lack the consideration necessary for a service or declared service when they are compensatory damages in nature. Describing such charges as interest does not convert them into consideration for a taxable declared service. Service-tax demand on these late-payment charges was therefore unsustainable, and the impugned order was set aside.
Late-payment charges received as interest for delayed payment for industrial-gas supplies lack the consideration necessary for a service or declared service when they are compensatory damages in nature. Describing such charges as interest does not convert them into consideration for a taxable declared service. Service-tax demand on these late-payment charges was therefore unsustainable, and the impugned order was set aside.
Note: It is a system-generated summary and is for quick reference only.
TaxTMI 
TaxTMI 
