https://www.taxtmi.com/caselaws?id=787266 The note addresses whether compensation for underutilised production capacity constitutes a declared service under clause (e) of Section 66E and whether its place of provision is outside India. It applies the contract-law test of consideration: because the idle-cost payment was an agreed component of pre-negotiated remuneration for maintaining capacity (not post-breach damages), it qualifies as a declared service. For place of provision it applies the Place of Provision Rules: Rule 5 applies only to services tied to a specifically identifiable immovable property, otherwise Rule 3 (location of recipient) governs. Resultantly the service is supplied to a recipient outside India and qualifies as 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 The note addresses whether compensation for underutilised production capacity constitutes a declared service under clause (e) of Section 66E and whether its place of provision is outside India. It applies the contract-law test of consideration: because the idle-cost payment was an agreed component of pre-negotiated remuneration for maintaining capacity (not post-breach damages), it qualifies as a declared service. For place of provision it applies the Place of Provision Rules: Rule 5 applies only to services tied to a specifically identifiable immovable property, otherwise Rule 3 (location of recipient) governs. Resultantly the service is supplied to a recipient outside India and qualifies as export of services. Case-Laws Service Tax Thu, 26 Feb 2026 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=787266