18% GST Applicable to Liquidated Damages: AAR (Maharashtra)

The Maharashtra Authority for Advance Ruling (AAR) held that liquidated damages are classifiable as ‘other services’ and is taxable at the rate of 18% GST. The applicant, Maharashtra State Power Generation Company Limited (Mahagenco), engages in the generation of power with an objective to make Power available to all at an affordable rate. In a contract entered with a contractor for the constructi…