Service tax on compensation paid for cancellation of an agreement, Service Tax

[tailor jaffrulla khan]

Whether Service tax is applicable on compensation paid on cancellation of agreement to sell?

Posts / Replies

[Sumit Aggarwal]

No till now as there is no service tax will applciable on this transacation as the transacation of sell of property is not liable to service tax and the transaction in question is incidental to sell of property.

[Ashok Jogalekar]

If the agreement is for providing service and in case of cancellation of such agreement or contract if any compensation is received, then service tax would be payable by the receiver on such consideration received.