https://www.taxtmi.com/caselaws?id=767294 Contractual recoveries for breach are taxable as declared services only when they are consideration for agreeing to do, refrain from doing, or tolerate an act; compensation or penal recovery for breach is not such consideration. On that basis, notice pay recovered from employees for premature exit was held outside service tax because it arose from the employment contract as compensation for non-observance of notice period. Cancellation charges and room charge retention for cancellation or no-show were likewise treated as contractual compensatory amounts, not consideration for tolerating a default, and were held not liable to service tax. en-us Wed, 12 Feb 2025 00:00:00 +0530 Sat, 15 Mar 2025 08:41:11 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=767294 Contractual recoveries for breach are taxable as declared services only when they are consideration for agreeing to do, refrain from doing, or tolerate an act; compensation or penal recovery for breach is not such consideration. On that basis, notice pay recovered from employees for premature exit was held outside service tax because it arose from the employment contract as compensation for non-observance of notice period. Cancellation charges and room charge retention for cancellation or no-show were likewise treated as contractual compensatory amounts, not consideration for tolerating a default, and were held not liable to service tax. Case-Laws Service Tax Wed, 12 Feb 2025 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=767294