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Is GST applicable on Liquidated Damage
Is GST applicable on Liquidated Damage or not?
Replies (2)
Quick Summary
As per Schedule II of CGST Act, 2017, there are some activities which are to be
treated as supply of goods or supply of services. Liquidated damages are covered under the
Clause S(e) of said Schedule II and are to be treated as Services. There is no specific
Service Accounting Code (SAC) for liquidated damages. It may be covered under Heading
"9997" [please refer Central Tax (Rate) Notification no.11/2017 dated 28.06.2017] on which
GST is payable @ 18%.
treated as supply of goods or supply of services. Liquidated damages are covered under the
Clause S(e) of said Schedule II and are to be treated as Services. There is no specific
Service Accounting Code (SAC) for liquidated damages. It may be covered under Heading
"9997" [please refer Central Tax (Rate) Notification no.11/2017 dated 28.06.2017] on which
GST is payable @ 18%.
As per the amend. In CGST act,2018 section 7 clause d has been deleted in the definition of supply.
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