Service Tax not payable on Notice pay mentioned in employment contract

XL Health Corporation India Pvt. Ltd. Vs Commissioner of Central Tax (CESTAT Bangalore) The term ‘notice pay’ mentioned in the employment contract cannot be considered as a service, more specifically as the taxable service inasmuch as neither of the parties to the contract have provided any service to each other. Thus, the phrase ‘service’ defined in Section 65B (44) ibid and ‘declared service’, as defined in Section 65B (22) are not applicable for consideration of such activity as a service for the purpose of levy of service tax. Further, the amount received as compensation by the...