Goods and Services Tax – GST – By: – Ranjan Mehta – Dated:- 27-9-2016 Last Replied Date:- 30-9-2016 – 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? Sec 3(1)(c) of Model GST law says that the Supply specified in schedule I shall be included in supply irrespective of fac
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ts 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 rules. This will give revenue authorities opportunity to question every sale of asset. Temporary application of business assets to a private
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ional 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 business. Thus, this means if any supply by a taxable person to any other person and without consideration is a supply under GST. The experts say that Stock transfers w
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