breach of contract – OnlineTaxUpdate

The Andhra Pradesh, AAR in the matter of South India Krishna Oil & Fats (P.) Ltd. held that the compensation amounts, such as liquidated damages or trade settlement, collected by the Applicant from customers for non-performance or breach of contracts constitute a supply of service and are liable to GST.

GST Article

GST DAILY – 96 – Liquidated damages paid to compensate injury or loss of damage suffered due to breach of contract is not taxable

byCA Pradeep Modi13/10/202313/10/2023

Whether Liquidated damages paid to compensate for injury or loss of damage suffered due to breach of contract is taxable?

Denial of ITC Original price was: ₹595.00.Current price is: ₹470.00.
GST E-Way Bill - Taxmann Original price was: ₹1,095.00.Current price is: ₹756.00.
GST Implications on RNPOs -CP Original price was: ₹995.00.Current price is: ₹745.00.
GST Ready Reckoner 2026 Original price was: ₹3,195.00.Current price is: ₹2,200.00.
Company Balance Sheet and Profit & Loss Account under Accounting Standards & Schedule III (for the F.Y. 2025-26) Original price was: ₹2,895.00.Current price is: ₹2,171.00.

Tag: breach of contract

Compensation collected for Liquidated Damages under the Agreement will be subject to GST

GST DAILY – 96 – Liquidated damages paid to compensate injury or loss of damage suffered due to breach of contract is not taxable