https://www.taxtmi.com/caselaws?id=784289 GST liability on liquidated damages for breach/non-performance was examined in light of Circular No. 178/10/2022. The HC held that under the service agreement the amounts received were compensatory in nature, falling within para 7 (including paras 7.1 and 7.1.6) of the Circular and Sections 73-74 of the Contract Act, and therefore did not constitute a taxable supply; consequently, the impugned show cause notice levying GST on such liquidated damages was quashed. On refund of amounts paid under protest, applying its prior ruling on non-voluntary collections during enforcement actions, the HC held the collection lacked authority of law and directed refund with 6% interest; the petition was allowed. en-us Mon, 08 Dec 2025 00:00:00 +0530 Thu, 01 Jan 2026 08:18:25 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=784289 GST liability on liquidated damages for breach/non-performance was examined in light of Circular No. 178/10/2022. The HC held that under the service agreement the amounts received were compensatory in nature, falling within para 7 (including paras 7.1 and 7.1.6) of the Circular and Sections 73-74 of the Contract Act, and therefore did not constitute a taxable supply; consequently, the impugned show cause notice levying GST on such liquidated damages was quashed. On refund of amounts paid under protest, applying its prior ruling on non-voluntary collections during enforcement actions, the HC held the collection lacked authority of law and directed refund with 6% interest; the petition was allowed. Case-Laws GST Mon, 08 Dec 2025 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=784289