No GST on recoveries on account of Notice Pay, Bond Forfeiture, Canteen Charges, ID Cards replacement Liquidated Damages etc.

Last updated: 05 November 2022

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The Haryana Advance Ruling Authority has ruled that Goods and Services Tax (GST) is not applicable to various recoveries and forfeitures made by M/s Rites Ltd. This includes amounts like Notice Pay Recovery, Bond Forfeiture by contractual employees, Canteen Charges, ID card replacement fees, and Liquidated Damages due to project delays. The ruling clarifies that these are generally considered compensation for breach of contract, outside the scope of supply, or covered under specific schedules of the CGST Act.

Court :
AAR, Haryana

Brief :
The AAR, Haryana in the matter of M/s Rites Ltd. [Advance Ruling No. HR/ARL/19/2022-23 dated October 18, 2022], Re has passed a ruling on the taxability of amount collected or received or forfeited as Notice Pay Recovery, Bond forfeiture of contractual employees, canteen charges, recovery on account of loss or replacement of ID Cards, Liquidated damages due to delay in completion, Forfeiture of earnest money and security deposit and bank guarantee by applicant, and Amount written off as creditors balance in the books of accounts of the applicant.

Citation :
Advance Ruling No. HR/ARL/19/2022-23 dated October 18, 2022

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1 Year PLAN

1999

(Excl. of GST ₹359)

2 Years PLAN

3499

(Excl. of GST ₹629)

BEST VALUE

3 Years PLAN

4999

(Excl. of GST ₹899)

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Judgement posted by

Bimal Jain

Service

FCA, FCS LLB with21 Yrs of Experience inTaxation Indirect and Direct: Education Qualification: B.Com (Hons) Chartered Accountants Company Secretary LLB Qualified SAP FI/CO Consultants Professional Membership: Chairmanof Indirect Tax Committee of PHD Chamber of Commerce Member of Indirec ... Read more

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