Is penalty for a work is liable for Service Tax?
This query is : Resolved
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
31 January 2009
If the penalty clause is explict in the agreement then it is not subject to service tax as it is not forming a part of the service component, But this is not in written terms, then yes it will be subject to service tax.
Only service charges are subject to service tax and not any other charges if there is a written arrangement
Only service charges are subject to service tax and not any other charges if there is a written arrangement
31 January 2009
Thanks for your reply Mr. Dayal
Here the penalty is agreed by the customer
and paying as per Tax Invoice, in which we collecting VAT and paying to concern department.
Here the penalty is agreed by the customer
and paying as per Tax Invoice, in which we collecting VAT and paying to concern department.
26 June 2023
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