https://www.taxtmi.com/forum/issue?id=111340 Liquidated damages levied for failure to meet performance or delivery obligations are commonly treated as a declared service - an agreement to tolerate an act - and thus may attract service tax; however, some argue penal sums lack consideration and are not taxable. Cenvat credit for tax paid on such charges depends on proving the taxed service is an input service used for taxable outputs, a connection that is often difficult to establish and may expose the claimant to challenge. en-us Sun, 08 Jan 2017 14:26:36 +0530 Thu, 23 Jan 2025 15:56:04 +0530 TaxTMI RSS Generator https://www.taxtmi.com/forum/issue?id=111340 Liquidated damages levied for failure to meet performance or delivery obligations are commonly treated as a declared service - an agreement to tolerate an act - and thus may attract service tax; however, some argue penal sums lack consideration and are not taxable. Cenvat credit for tax paid on such charges depends on proving the taxed service is an input service used for taxable outputs, a connection that is often difficult to establish and may expose the claimant to challenge. Discussion-Forum Service Tax Sun, 08 Jan 2017 14:26:36 +0530 https://www.taxtmi.com/forum/issue?id=111340