A domestic company had taken the land and the super structureowned by a Trust on lease since 1974.The company has paid monthly lease rent of Rs.800/to the lessor trust.The lease had been renewed from time to time and the last one was renewed upto 30-04-2024.The lessee company prematurely had surrendered the land and the superstructure to the lessor and received a sum of Rs.25 Lakh as compensation from the lessor.Lessee company is a GST registrant whereas the lessor trust is unregistered person for GST.Somebody says that the surrender attracts GST as per Section 9(1) of the CGST Act.Somebody said that there is no GST as it is a return of land and building to the owner trust.
In this regard I need your guidance as to whether the GST is applicable to the compensation of Rs.25 Lakhs or not.If applicable,the question of issuing invoice by the registered person does arise.If so shall the lessee company have to issue GST Invoice?. Because the lessor trust is unregistered GST Person.Hence please advise me to handle this problem suitably.Suppose if the compensation receipts being the amount for surrender of lease,then shall GST applicable?.This point also may be Kindly Clarified.
CAclubindia
