The Andhra Pradesh AAR ruled that compensation amounts collected for non-performance or breach of contracts constitute a supply of service and are liable to 9% CGST and 9% SGST under Heading No. 9997 at Serial No. 35 of Notification No. 11/2017-Central Tax (Rate) dated June 28, 2017. The ruling also stated that the Input Tax Credit of common services does not need to be reversed under the CGST Rules/APGST Rules for such activity.
Source A2ztaxcorp