2.10 A subcontractor who is in breach of a construction contract pays liquidated damages to the head contractor. Is the payment of liquidated damages by the subcontractor consideration for a taxable supply?

Non-Interpretative - straight application of the law

ATO position

No. For an explanation of the reasons for the answer, see paragraphs 110 to 114 of. GSTR 2001/4 Goods and services tax: GST consequences of court orders and out-of-court settlements.