2025-VIL-180-AAR
  1. Home
  2. 2025-VIL-180-AAR

SGST Advance Ruling Authority

GST – Gujarat AAR - Liquidated Damages, Payment of penalty for breach of Contract - As per the Concession Agreement the applicant is liable to pay liquidated damages for various material defaults, breaches or failures in performing its obligations under the agreement - Whether the liquidated damages paid by the applicant for various material defaults, breaches or non-performance of obligations under the Concession Agreement are subject to GST - HELD - The CBIC Circular No. 178/10/2022-GST dated 3-8-2022 clarified that where the amount paid as damages is only to compensate for injury, loss or damage suffered by the aggrieved party due to breach of the contract, and there is no agreement, express or implied, by the aggrieved party to refrain from or tolerate an act or to do anything for the party paying the liquidated damages, such payments do not constitute consideration for a supply and are not taxable - The Concession Agreement between the applicant and SSL clearly stipulates the liquidated damages as a genuine pre-estimated loss and damage likely to be suffered and incurred by SSL due to the applicant's breach of the contract. There is no evidence that SSL is tolerating any act of the applicant by recovering the damages. The damages are merely a compensation for the injury, loss or damage suffered by SSL due to the applicant's breach of the contract terms - The liquidated damages paid by the applicant to SSL for various material defaults, breaches or non-performance of obligations under the Concession Agreement are not liable to GST – Ordered accordingly
Download File

Quick Search

/

Advance Search

GST Resources

/

Gst Rate Finder

Tax Vista

Your Weekly Tax Recap

By Kasi Viswanathan V

Weekly Summary

VIL Video

GSTR-9 & GSTR-9C of FY24-25
By CA Vivek Jalan

Create Account

Security-Code
New Code?

Log In

New User ? Forgot Password ?

Forgot Password

Security-Code
New Code?
Please Note: This facility is only for Subscribing Members.

Email this page

Feedback this page

Schedule a Demo

Schedule a demo to know the features and advantages of VILGST portal. Get to know the tips to find the desired results in faster way.

Caselaw Request Form (CRF)

Didn’t find what you are searching for? No worries, please give us the following details and VIL will email you the desired Caselaws at the earliest:

Security-Code
New Code?