Tax Department asks Companies to Pay 18% GST on Non-Compete Fee

The Central Board of Indirect Taxes and Customs (CBIC) has recently issued notice to several private equity firms, strategic investors and others those who have bought businesses and entered into Non-Compete agreements with sellers demanding them to pay 18% GST on the Non-Compete fee. The Non-Compete agreements that were exempted from tax till now will no longer be able to enjoy the tax exemption.