Penalties for delayed work/exit don't attract service tax as not for any service rendered.

Penalty recovered from contractors for not completing work within stipulated time does not constitute consideration for declared service u/s 66E(e) of Finance Act, 1994, as it is merely a penalty imposed for non-fulfillment of contractual condition, not consideration towards any service. Consideration recovered from employees for not serving notice period before leaving job does not attract service tax u/s 66E(e), as employer merely facilitated employee's sudden exit upon compensation, not rendering any taxable service. Demand for service tax on such penalties/recoveries is unsustainable and set aside by the Appellate Tribunal. .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X