Go AD-Free with CAclubindia Pro and get a FREE CCI Coffee Mug. Subscribe Now!

Gst on service bond agreement

21 June 2020

sir, I made bond agreement with one of the CPSE ( bsnl) for service to BSNL 2 years. if I resign for the BSNL then is any GST applicable on break of service bond agreement please reply it.

Reply
Follow
Share

4 Replies

Surjeet Negi (947 Points)
Replied 21 June 2020

As per your query, I understand that you want to understand abt the gst applicability on cancellation of contract... I this case if they are charging cancellation fee from u then there would be gst applicability on co. not on u

Upgrade to CAclubindia Pro. Subscribe Now!

Pankaj Rawat (GST Practitioner) (55057 Points)
Replied 22 June 2020

Yes it's taxable .
In term of Para 5 of Schedule II , The activity of agreeing to the obligations to tolerate an act or a situation. means any kind of penalty for termination of agreement or contract , the GST attracts.
Hence if there is any cluase in the such agreement , which binds you to pay for termination of contract , the GST is Applicable.

Poreddy bhargava reddy (3 Points)
Replied 22 June 2020

Thank you sir for give information but I have one doubt according to cgst act schedule III section 7 services by employee to employer part of contract neither treat as supply of goods nor supply of services so please clarify it.