Hi all
this is the case
we are civil contractors
we raised an invoice of Rs. 10 lakhs to our customer
but the customer has paid only Rs. 9 lakhs and for the remaining one lakh he sends a debit note showing is as liquidated damages.
my questions is whether we have to pay service tax on liquidated damages are not.
Service tax is payable on collections. As your customer has deducted the payment, one need not discharge service tax on the same.
thnks for ur reply athul
dt i knw. but service tax dept ask us to pay the service tax on liquidated damages also.
do u knw any case laws supporting this factrs
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