Will anything and everything, done anywhere, for anybody, for business/no business, for money/without money will constitute supply under GST??
By: – Ranjan Mehta
Goods and Services Tax – GST
Dated:- 27-9-2016
In my previous article I tried to throw light on the concept of supply u/s 3 of Model GST Law . We discussed section 3 there and left the Schedule I & II, which contain further provisions in relation to Supply. We will discuss Schedule I here in this article. Although Schedule I contains only 5 clauses but it has created a havoc in the minds of Tax practitioners, who have gone through it. These provisions are Draconian and against the interest of General Public and will cause a lot of confusion in the mind of people as well as tax practitioners. These provisions are such that they can entitle any transaction to be covered under ambit of GST. We explain here how.
What happens in case where there is no consideration received or receivable against the Supply made?
S
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chedule I is reproduced below:-
1. Permanent transfer/disposal of business assets.
2. Temporary application of business assets to a private or non-business use.
3. Services put to a private or non-business use.
4. Assets retained after deregistration.
5. Supply of goods and / or services by a taxable person to another taxable or nontaxable person in the course or furtherance of business.
Provided that the supply of goods by a registered taxable person to a job-worker in terms of section 43A shall not be treated as supply of goods.
* Permanent transfer/disposal of business assets : Earlier also there were provisions in VAT Laws for such transfers and the dealers were liable to pay VAT on sale of such assets but earlier it was taxable only on the basis of transaction value. As per this clause even if there is no consideration is received but assets are permanently transferred out of business then they will be covered under GST and the value shall be taken as per Valuation ru
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ch. Due to these the authorities have got immense powers. They can question everybody about their private/non business services.
For Ex- A professional cook provided his services on a Sunday to some school for judging a Cooking competition without any consideration. Now the authorities can say that even since no business same is a services under this clause hence a supply under GST.
Assets retained after deregistration: At the event of deregistration total value of assets retained shall be deemed to be supply so that the Govt. can take back the credit allowed.
Supply of goods and / or services by a taxable person to another taxable or nontaxable person in the course or furtherance of business: This is the most vicious provision in this schedule. Every transaction which is not covered anywhere will be covered. It has following ingredients.
* No Consideration
* Supply by a taxable person
* To any other person (be it taxable or non taxable)
* In the course or furtherance of b
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are covered.
However supply of goods and/or services by a Job worker shall not be considered a supply under provisions of Sec 43A which will discuss later under another article.
Thus the answer to title question is YES, anything and everything, done anywhere, for anybody, for business/no business, for money/without money will constitute supply under GST.
Again, in my opinion, Schedule I contains such draconion provisions that their use may create huge problems in the tax compliances by the assessees and the Govt should look into these before passing the final law. Stay tuned for my next article to understand the Schedule II- Deemed supply transactions.
(CA Ranjan Mehta, Jain Shrimal & Co. Jaipur, +91-9672372075, ranjanmehta21@gmail.com)
Reply By Ganeshan Kalyani as =
The provision of GST has covered almost all possibility of taxing the assessee. Personal use or business use both. Some clarity is required. Business and personal should not be mixed upon. Tax should be on busin
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