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Informative

Booking cancellation charges are compensation, No Service tax Demandable: CESTAT

Update / Judgement Date

27 May 2025

Source

Taxscan

Author

Team — WCP Legal Desk

Reading Time

1 min read

Excise, VAT & Custom

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has ruled that booking cancellation charges are compensatory in nature and thus not liable for service tax. The tribunal set aside a ₹2.2 crore demand, clarifying that such charges are for breach of contract rather than for a provided service.