https://www.taxtmi.com/forum/issue?id=109779 Penalty or liquidated-damage amounts for breach of contract are generally not "consideration" for a service and thus not taxable; alternatively, such charges may fall within Section 66E(1)(e) as a declared service if the contractual clause evidences agreeing to tolerate or refrain from an act. Service tax paid on penalty is ordinarily not admissible as Cenvat/input credit under Rule 2(l) and Rule 3, and tax paid without authority of law cannot be credited; the question is fact-specific and dependent on contractual wording and departmental guidance. en-us Sat, 23 Jan 2016 12:32:05 +0530 Thu, 23 Jan 2025 15:56:34 +0530 TaxTMI RSS Generator https://www.taxtmi.com/forum/issue?id=109779 Penalty or liquidated-damage amounts for breach of contract are generally not "consideration" for a service and thus not taxable; alternatively, such charges may fall within Section 66E(1)(e) as a declared service if the contractual clause evidences agreeing to tolerate or refrain from an act. Service tax paid on penalty is ordinarily not admissible as Cenvat/input credit under Rule 2(l) and Rule 3, and tax paid without authority of law cannot be credited; the question is fact-specific and dependent on contractual wording and departmental guidance. Discussion-Forum Service Tax Sat, 23 Jan 2016 12:32:05 +0530 https://www.taxtmi.com/forum/issue?id=109779