GST:
Circular issued for GST applicability on liquidated damages, compensation & penalty out of breach of contract and activities falling under “Agreeing to the obligation to refrain from an act or to tolerate an act or a situation, or to do an act” has been specifically declared to be a supply of service in para 5 (e) of Schedule II of CGST Act if the same constitutes a “supply” within the meaning of the Act.
[Circular No. 178/10/2022-TRU dated 3rd August, 22]