Amount paid for early termination of the lease constitutes consideration for the supply
Court :
AAR, Karnataka
Brief :
The AAR, Karnataka, in the case of M/s.Enzyme Business Centre [Advance Ruling No. DGR 33 of 2023 dated November 16, 2023],held that, the damages received by the Applicant from the tenant towards the termination of the sub-lease before the agreed upon lock-in period as per the sub-lease deed agreements tantamount to supply as per Section 7 of the Central Goods and Service Tax Act, 2017 ("the CGST Act")and the amount received towards damages as per the settlement agreement is to be construed as Consideration for the supply. The services provided by the Applicant are classifiable under Chapter heading 9972 and are liable to GST at the rate of 18%.
Citation :
Advance Ruling No. DGR 33 of 2023 dated November 16, 2023
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Bimal Jain
Published in GST
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