2019 (7) TMI 1897 - AT - Service Tax

Recovery of salary paid - breach of contract - employee leaves the employment before completion of contract period - HELD THAT - On perusal of record and provisions of Service Tax w.e.f. 1 July 2002 it is noted that a service provided by employee to an employer is not covered by the provision of service tax. The transaction in the present case is recovery of such salary paid to the employee for breach of contract. Therefore the same is not covered by levy of Service Tax. Appeal allowed - decided in favor of appellant.

Summary

The Appellate Tribunal CESTAT ALLAHABAD ruled that recovery of salary from an employee for breach of contract is not subject to Service Tax as it is not considered a provision of service. The impugned order was set aside and the appeal was allowed.