https://www.taxtmi.com/circulars?id=66728 The circular explains that the declared service of agreeing to refrain, tolerate or do an act requires an express or implied contractual agreement and corresponding consideration; mere payments for breach, statutory cancellation, fines or penalties are not consideration for such a supply. Payments that compensate or penalise (liquidated damages, statutory compensation, cheque dishonour fines, forfeiture, bond recoveries) are events within the contract or statute and not taxable unless they represent consideration for an independent agreement to tolerate or perform a service. Ancillary charges bundled with a principal taxable supply (late payment fees, cancellation charges) are taxable as the principal supply; exempt principal supplies render ancillary charges non-taxable. en-us Thu, 04 Aug 2022 00:00:00 +0530 Fri, 11 Aug 2023 18:30:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/circulars?id=66728 The circular explains that the declared service of agreeing to refrain, tolerate or do an act requires an express or implied contractual agreement and corresponding consideration; mere payments for breach, statutory cancellation, fines or penalties are not consideration for such a supply. Payments that compensate or penalise (liquidated damages, statutory compensation, cheque dishonour fines, forfeiture, bond recoveries) are events within the contract or statute and not taxable unless they represent consideration for an independent agreement to tolerate or perform a service. Ancillary charges bundled with a principal taxable supply (late payment fees, cancellation charges) are taxable as the principal supply; exempt principal supplies render ancillary charges non-taxable. Circulars GST - States Thu, 04 Aug 2022 00:00:00 +0530 https://www.taxtmi.com/circulars?id=66728