Service tax on liquidated damages & penalty

JAYANTA KUMAR BANDYOPADHYAY (professional service) (293 Points)

10 June 2015  

In our foreign purchase order, we are inserting penalty & liquidated damages clauses for short supplies / delayed supplies / mismatches in specifications. Lab test will be in our Indian factory and we are importer. My reading is that Service Tax is applicable on Liquidated Damages under Section 66E of the Finance Act, 1994.

Please confirm.

Best regards,

 

jayanta

10.06.2015