https://www.taxtmi.com/caselaws?id=417444 The Tribunal ruled that compensation for premature resignation is not subject to Service Tax as it does not constitute consideration for a service but penalties for non-performance of the contract. The distinction between consideration and compensation was clarified, emphasizing that compensation is not a consideration for tolerating a situation. The Tribunal also rejected the applicability of Service Tax on liquidated damages or penalties for breach of contract terms, citing relevant case laws and CBEC guidance notes. Ultimately, the Tribunal set aside the order, holding that notice pay for premature resignation does not give rise to the rendition of service and is not exigible to Service Tax. en-us Fri, 14 Jan 2022 00:00:00 +0530 Wed, 09 Nov 2022 13:15:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=417444 The Tribunal ruled that compensation for premature resignation is not subject to Service Tax as it does not constitute consideration for a service but penalties for non-performance of the contract. The distinction between consideration and compensation was clarified, emphasizing that compensation is not a consideration for tolerating a situation. The Tribunal also rejected the applicability of Service Tax on liquidated damages or penalties for breach of contract terms, citing relevant case laws and CBEC guidance notes. Ultimately, the Tribunal set aside the order, holding that notice pay for premature resignation does not give rise to the rendition of service and is not exigible to Service Tax. Case-Laws Service Tax Fri, 14 Jan 2022 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=417444