https://www.taxtmi.com/caselaws?id=796057 Notice pay recovered from an outgoing employee for failing to serve the stipulated notice period is compensatory payment for breach of the employment contract, not consideration for an independently agreed service. The employment-related stipulation remains within the employee-employer relationship, which is excluded from service tax. A declared service requires an independent contractual arrangement and consideration directly linked to an obligation to refrain from, tolerate, or perform an act. Notice pay, liquidated damages and breach penalties do not meet that test. Consequently, notice pay recovered from employees is not exigible to service tax. en-us Thu, 23 Jul 2026 00:00:00 +0530 Fri, 31 Jul 2026 08:27:55 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=796057 Notice pay recovered from an outgoing employee for failing to serve the stipulated notice period is compensatory payment for breach of the employment contract, not consideration for an independently agreed service. The employment-related stipulation remains within the employee-employer relationship, which is excluded from service tax. A declared service requires an independent contractual arrangement and consideration directly linked to an obligation to refrain from, tolerate, or perform an act. Notice pay, liquidated damages and breach penalties do not meet that test. Consequently, notice pay recovered from employees is not exigible to service tax. Case-Laws Service Tax Thu, 23 Jul 2026 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=796057