The Indian Central Board of Indirect Taxes and Customs Aug. 3 issued Circular No. 178/10/2022-GST, clarifying the GST applicability on liquidated damages, compensation, and penalties from breaches of contracts. The clarification explains: 1) the definition of the supply of a service activity for tax purposes; 2) examples of activities that constitute a supply of services; 3) the conditions to be met for an agreement constituting a taxable supply to exist; 4) the definition and examples of liquidated damages; and 5) the taxability of various activities considered a supply of services. [India, Central Board of Indirect Taxes and Customs, 08/03/22]
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