Circular No. 178/10/2022-GST dated: 03.08.2022 cancellation charges cbic circular

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student
248 Points Posted on 05 September 2022
hi
pls clarify me whether cancellation charges are to be treated as liquidated damages??

i couldn't comprehend the conclusion in the recent circular issued by the dept.
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On 05 September 2022 at 17:01 Report
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This discussion seeks clarification on whether GST applies to cancellation charges, specifically if they should be treated as liquidated damages. The consensus from the CBIC Circular 178/10/2022 suggests that liquidated damages are not considered a supply and are thus not taxable. However, cancellation charges are viewed as a form of supply and are therefore subject to GST.

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GST Practitioner
55067 Points Posted on 06 September 2022
No.... LD charges are not cover under supply definition. its being loss compenciated to recepient. where as the cancellation charges are covered under supply hence taxablr
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On 06 September 2022 at 01:19
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2 Points Posted on 17 January 2023
Holam
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On 17 January 2023 at 15:41

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