https://www.taxtmi.com/caselaws?id=787266 Compensation for underutilised production capacity constitutes a declared service where it is an agreed component of remuneration for maintaining and making capacity available under a subsisting contract, rather than damages for breach. Consideration requires an act or abstinence at the promisor's request; pre-agreed idle-cost compensation meets that requirement. Place of provision is governed by the recipient-location rule unless the service directly relates to specifically identifiable immovable property. Capacity-holding remuneration, though linked to plant and machinery costs, does not grant a right to use immovable property. Where the recipient is outside India and export conditions are met, the service qualifies as an export of services. en-us Thu, 26 Feb 2026 00:00:00 +0530 Mon, 02 Mar 2026 12:12:23 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=787266 Compensation for underutilised production capacity constitutes a declared service where it is an agreed component of remuneration for maintaining and making capacity available under a subsisting contract, rather than damages for breach. Consideration requires an act or abstinence at the promisor's request; pre-agreed idle-cost compensation meets that requirement. Place of provision is governed by the recipient-location rule unless the service directly relates to specifically identifiable immovable property. Capacity-holding remuneration, though linked to plant and machinery costs, does not grant a right to use immovable property. Where the recipient is outside India and export conditions are met, the service qualifies as an export of services. Case-Laws Service Tax Thu, 26 Feb 2026 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=787266