https://www.taxtmi.com/caselaws?id=428060 Amounts collected as liquidated damages, penalty or late delivery charges under contractual default clauses are not liable to service tax under section 66E(e) of the Finance Act, 1994. The provision applies only where there is an agreement, for consideration, to refrain from an act, tolerate an act or situation, or do an act. Contractual stipulations for pre-determined damages are intended to secure performance and protect commercial interests, not to create a bargain for tolerating breach. Such recoveries are compensatory in nature and do not amount to consideration for a declared service. en-us Tue, 20 Sep 2022 00:00:00 +0530 Sun, 30 Apr 2023 13:15:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=428060 Amounts collected as liquidated damages, penalty or late delivery charges under contractual default clauses are not liable to service tax under section 66E(e) of the Finance Act, 1994. The provision applies only where there is an agreement, for consideration, to refrain from an act, tolerate an act or situation, or do an act. Contractual stipulations for pre-determined damages are intended to secure performance and protect commercial interests, not to create a bargain for tolerating breach. Such recoveries are compensatory in nature and do not amount to consideration for a declared service. Case-Laws Service Tax Tue, 20 Sep 2022 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=428060