https://www.taxtmi.com/caselaws?id=429785 The AAAR Telangana ruled that liquidated damages received by an electricity producer from a contractor for commissioning delays are not subject to GST. The authority relied on CBIC Circular No. 178/10/2022-GST, which clarifies that when the principal supply (electricity production and distribution) is GST-exempt, ancillary activities remain non-taxable. The damages constituted mere compensation for breach of contract without any reciprocal obligation, representing a flow of money rather than consideration for supply. The appeal was disposed of in favor of the applicant. en-us Wed, 19 Oct 2022 00:00:00 +0530 Fri, 11 Apr 2025 10:27:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=429785 The AAAR Telangana ruled that liquidated damages received by an electricity producer from a contractor for commissioning delays are not subject to GST. The authority relied on CBIC Circular No. 178/10/2022-GST, which clarifies that when the principal supply (electricity production and distribution) is GST-exempt, ancillary activities remain non-taxable. The damages constituted mere compensation for breach of contract without any reciprocal obligation, representing a flow of money rather than consideration for supply. The appeal was disposed of in favor of the applicant. Case-Laws GST Wed, 19 Oct 2022 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=429785