ISSUE:
Whether GST is applicable on liquidated damages imposed due to delays in contract performance?
Whether liquidated damages constitute an independent supply or an adjustment to the contract price?
Whether the time of supply for GST purposes arises upon the occurrence or establishment of delay?
Whether liquidated damages qualify for input tax credit by the contractor?
RULE:
Liquidated damages payable due to delays in contractual performance are considered a taxable supply under the GST Act when they constitute an agreement to "tolerate an act" or a situation.