MANU/DSTX/0003/2023

Ministry : Ministry of Finance

Department/Board : Central Board of Indirect Taxes and Customs

Circular No. : 214/1/2023-Service Tax

Date : 28.02.2023

Notification/ Circulars Referred : Circular No. 178/10/2022-GST dated 3rd August, 2022 MANU/GSCU/0016/2022

Citing Reference:
Circular No. 178/10/2022-GST dated 3rd August, 2022 MANU/GSCU/0016/2022  Referred

To,

1. The Principal Chief Commissioner/Chief Commissioner, CGST & CX (All)

2. The Principal Director General/Director General (All)

3. The Principal Commissioner/Commissioner, CGST & CX (All)

4. Webmaster.cbic@icegate.gov.in for uploading the Circular on CBIC's website

Madam/Sir,

Leviability of Service Tax on the declared service "Agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act" under clause (e) of section 66E of the Finance Act, 1994

1. An issue has arisen on the levy of service tax on liquidated damages arising out of breach of contract, forfeiture of salary or payment of bond amount in the event of the employee leaving the employment before the minimum agreed period and similar other issues arising out of clause (e) of section 66E of the Finance Act, 1994. Reference has also been invited to Circular No. 178/10/2022-GST dated 3rd August, 2022 regarding applicability of GST on liquidated damages, compensation ........