Is penalty for a work is liable for Service Tax?
This query is : Open
31 January 2009
Can anybody answer the following?
Our company sales our commodities by taking to customer place by company's own/registered vehicles after place the order of a customer. After supply the items, the customer didn't take immediately the items and delaying the vehicles. For delaying the vehicle for a stipulated time, we;re charging penalty after that time per day basis. In the billing we're showing the commodity value and this penalty value and paying VAT for both.
Is this penalty for delaying is liable for Service Tax? Please study and give answers
Our company sales our commodities by taking to customer place by company's own/registered vehicles after place the order of a customer. After supply the items, the customer didn't take immediately the items and delaying the vehicles. For delaying the vehicle for a stipulated time, we;re charging penalty after that time per day basis. In the billing we're showing the commodity value and this penalty value and paying VAT for both.
Is this penalty for delaying is liable for Service Tax? Please study and give answers
Arbind Aggarwal
(Expert)
03 February 2009
No it is not liable for any service tax.
19 April 2009
The penalty amount is not in relation to providing the service. Therefore is not taxable for the purpose of service tax.
Taxing is only on the part of amount related directly to providing the service or any amount in relation to providing the service.
Penalty is excluded as it is part of agreement spelt out separately
Taxing is only on the part of amount related directly to providing the service or any amount in relation to providing the service.
Penalty is excluded as it is part of agreement spelt out separately
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