The case deals with the issue of whether the amount retained through forfeiture of earnest...

The case deals with the issue of whether the amount retained through forfeiture of earnest money/security deposits of contractors can be considered as consideration for declared services u/s 66E(e) of the Finance Act, 1994, which covers "agreeing to the obligation to refrain from an act or to tolerate an act or a situation, or to do an act." The Tribunal held that the forfeited amount cannot be considered as consideration towards rendering declared services u/s 66E(e). The cancellation of the contract itself is not considered a service. This decision is in line with earlier rulings of the Tribunal and the Supreme Court in the case of South Eastern Coalfields Limited. The Department's Circular No. 214/1/2023-ST dated 28th February 2023 clari..... .....

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