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Informative

Relief for SAIL: CESTAT Rules Forfeited Amount on Breach of Contract Not Liable to Service Tax

Update / Judgement Date

01 Sept 2025

Source

Taxscan

Author

Team — WCP Legal Desk

Reading Time

1 min read

Excise, VAT & CustomOther Legal Matters

The CESTAT has provided relief to SAIL, ruling that a "forfeited amount on a breach of contract" is "not liable to service tax." The tribunal's decision, which is a significant victory for the company, was made on the grounds that the company's claim was not supported by evidence. The ruling clarifies that a tax authority can't add a tax to a company's account without a valid reason.